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Should you retire right now?

Some money experts have said that 2022 is a dangerous year to retire, but what if you need to? Here are five things to consider.

SAINT LOUIS, Mo. — With inflation, rising rates, and a financial crisis, some people are worried about retiring right now.

In fact, even as more Americans receive pay raises, the rate of inflation makes increases feel more like a paycut. According to Moody's Analytics, the average American is spending around $460 more a month than the amount paid for the same thing last year. 

A University of Michigan study predicts real disposable income per American may fall to the lowest since the Great Depression.

It's something that a lot of potential retirees consider since their money is not only down in their retirement accounts, it's likely those dollars aren't going to go as far. So, many people wonder, is it worth retiring? 

We asked Jeff Sachs from Sachs Financial for advice.

1. It's not necessarily about what you have or what you make. It's about what you save. "The first question that I ask anybody is, 'what does it cost to be you?'" said Sachs. "'What does it cost to maintain your lifestyle? And where does that money come from?'" 

Sachs said American workers don't have the pensions they used to have, social security doesn't go as far, and inflation is making things more challenging. Planning ahead can make a difference. 

2. A good rule of thumb is to make 80% of your current income during retirement through savings plans and social security. "You need about 80% of that because you aren't driving to work every day," said Sachs. "You're not driving to work, you aren't buying lunches, you aren't contributing to your 401(k) and your social security and all of that. So you need a little bit less income."

3. If you have time to strategize, it's good to have cash. "I know it sounds terrible to say you should have several years of money in cash, but when the market goes down, and you're drawing money off of your accounts, you're just digging a hole deeper," said Sachs. "If you're going to retire sooner rather than later, make sure that you've got enough money to weather this storm." 

Sachs said downturns typically last a couple of years.

4. Consider a partial retirement, also called "downshifting." Sachs said it can be a little scary to think about quitting work entirely after 30-plus years. Maybe consider going three days a week or going part-time. 

"It makes it so that you have a little bit more income in the early part of your retirement," said Sachs. It also creates more income fo you in the future. 

"All these studies out there show that if you have a purpose in life, if you have something to do every day and get out of the house, you'll be happier," said Sachs. "And studies show you actually will live longer, so that's the goal, right? Have more money, live longer, and be happier in retirement. That's the whole reason for downshifting. 

5. Know that it's never too late to start planning your retirement, and it's not just for people who are financially well-off. Sachs said it's pretty typical for people to delay financial planning until they're in their 50s because that's when they realize retirement is just around the corner. Most people don't have the means to plan for their retirement when they're younger because they're in debt or busy raising kids.  

"I think if you haven't started planning, now's the time to start," said Sachs. "We have clients that come in that are in their fifties, sixties, even in their seventies and we're trying to figure out how to create the income and how to make sure that they can maintain their lifestyle."

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