As a self-employed registered financial consultant, Mar Sue Durrbeck is in a business from which "you don't have to retire--ever," she says. But, now in her 70s, Durrbeck is ready to spend more time visiting her children, far from the nasty Chicago-area winters. While she has ample experience helping others plan their retirement, when she started contemplating her own, she faced some tough questions--ones that everyone should face sooner rather than later. The most fundamental one involves how much money you'll need. It's a crucial yet often neglected question; more than a quarter of small-business owners don't think they have enough savings to fund a comfortable retirement. A good starter calculation: Figure out what your annual expenses will be once you retire, minus Social Security and pensions, and stash away 25 times that amount.

Also important are the more philosophical questions, Durrbeck says--for example, "What will I do that is meaningful?" Answering these questions now is the best first step to getting ready for your long-term financial future.


1. What's your ideal vision?

How do you see spending your time so that your mind, body, and spirit are engaged? Since you may be spending 30 years or more in retirement, write down what you'd like to do. Maybe it involves volunteering and part-time work; maybe it involves travel or moving to a second home or another activity that will require a significant cash reserve. Whatever your vision, put a price tag on it now, so that you can afford to do what you want, in the style you would like.


2. Do you want to take a plunge--or gradually wade in?

Look around at others who have retired and ask yourself whom you envy. Maybe you're ready to stop working entirely--though going cold turkey doesn't work for a lot of people, according to Mitch Anthony, a coach to financial advisers (including Durrbeck) and the author of The New Retirementality: Planning Your Life and Living Your Dreams at Any Age You Want. Many new retirees get bored sitting around the house--which can be a recipe for marital annoyance, especially if you or your spouse is used to being alone during the day.

Going part-time is a good way to make a gradual transition. Like many small-business owners, Durr­beck isn't retiring all at once, but she is starting to shift more operations to her business's buyer, another experienced adviser who "shares my values," she says.


3. What's your backup plan?

Like many retirees, Durrbeck is concerned about what will happen if she gets sick or disabled. She and her husband both carry long-term-care insurance, for expenses including nursing-home or in-home care. If you retire before 65 (the usual age of Medicare eligibility), it gets complicated: Will you need to buy medical coverage, or to "self-insure" using your savings? If so, you'll probably need at least $200,000 to cover health care expenses.

4. What do you want to be your legacy?

An estate-planning lawyer can always help you with leaving money to heirs or favorite causes. But first you need to figure out the greater, less financial contribution you want to make to your community. Durrbeck, for example, wanted to leave a business that treats its clients with integrity. She spent her career building her client relationships, and so looked long and hard for a buyer who would maintain the reputation of her business.

To kick off your retirement planning, you can figure out this legacy right now. As Durrbeck says, "Our memories will have very little to do with the money we made--but rather with the kind of life we have lived."