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Enough money to retire? Don't worry, be ready

In the final part of "Today's Money for Women," financial editor Jean Chatzky addresses concerns women face preparing for retirement.

Getting ready for retirement can be a daunting task with so many bases to cover. How much money will you need saved? What about future health care costs? How does a mortgage factor in? Will I need to keep a part-time job? With all of these questions, don't let worry and uncertainty plague your preparations. In the final part of "Today's Money for Women," financial editor Jean Chatzky shares her advice on how to plan successfully for this major life stage. Here are her suggestions:The thought of retiring is completely intimidating for a lot of women for all sorts of financial reasons. More than half of women have little or no money left to save for retirement once they pay their bills. (The figure is even higher — nearly two-thirds — for Hispanic and African American women). That's why 38 percent believe they will live at or near the poverty level once they retire. And 52 percent believe they'll continue to work once they reach the retirement age.

It doesn't have to be that way. No. You may not be able to afford the dream of stopping work completely in your early 60s to travel the globe, move to a sunshine state or play golf on a daily basis. But few people these days — women OR men — can afford that. But with some solid planning and a few basic smart money moves, you should be able to slow down and enjoy your later years. 

Make a retirement budget
The big numbers we often talk about when it comes to how much you need to retire are meaningless unless you understand what it's going to cost you to live the lifestyle you want. Nearly one-third of Americans in their 60s admit they don't know how much it will take to retire. That's a big problem. So take the time to work the numbers. Understand, your costs for some things — like healthcare and travel — may grow. But you may also be able to stop spending on other big ticket items — work clothes, communication, technology like blackberries and big buckets of cell phone minutes. Once you have that budget, take a look at how much you will have coming in if you draw down four percent of your retirement nest egg and combine that with social security. If it's enough, then you can comfortably retire. If not, consider working a few more years. The longer you work, the fewer years you have to draw down your retirement nest egg, and the more years of contributions you can take. It's a double bonus.

Transition into a job/career that will provide income and stimulation
If it looks like you'll be short of cash for more than just a few years, consider using your last few working years (in your traditional job) to transition into a job or career that will sustain you for more than just a few years. Understand, there are many reasons why retirees continue to work. It's not just money. It's boredom. At age 65, even 70, many people are vital with much to contribute. They don't want to stop. But they don't want to put in a nine-to-five day either. Consider trying to build a consulting business on the side, transitioning to part-time with your current employer, or doing something you've always dreamed of doing — whether it's working in a bookstore or getting certified as a sommelier and finding work in a restaurant. 

Use your home equity wisely
About 39 percent of people age 65 to 75 are now carrying mortgages. That's about one-third more than were carrying mortgages in 1989 according to Harvard's Joint Center for Housing Studies.  Those mortgages are one of the reasons people are forced to continue to work. The time you retire is the time to think about eliminating that large chunk of debt. There are a number of ways to do that. You can trade down to a smaller home that you can pay off completely. Or you can consider a reverse mortgage that will allow the bank to buy your house back from you and provide you with a stream of income while allowing you to live there. With home prices at a high, this is a good time to think about one.

Focus on your health care needs 
For soon-to-be retirees, the big fear isn't money — the big fear is health. You want to be sure that your healthcare coverage is in order — that you have a solid medigap policy and that you have taken the time to understand what you're getting from Medicare. If you purchased long-term care insurance, you want to be sure that you keep that policy up. That may, at some point, mean talking to your adult children about helping with the premiums. It's important to keep them in the loop at all times about what you're thinking of doing regarding retirement — your living situation, your healthcare and financial directives — in case at any point you're unable to take care of yourself.

Get help if you need it Planning for and transitioning to retirement is incredibly complicated and cumbersome, and for many people, intimidating. If you find that you have questions, it's much better to hire a financial advisor — even if you do it just for a few hours, to answer those questions and get you on the right track — than to simply take a stab and guess.

Jean Chatzky is the financial editor for “Today,” editor-at-large at Money magazine and the author of “Talking Money: Everything You Need to Know About Your Finances and Your Future.” Her latest book, "Pay It Down: From Debt to Wealth on $10 a Day," is now in bookstores. Copyright ©2005. For more information, go to her Web site, .