Last week was yet another emotional roller coaster for anyone who follows financial news, especially for anyone thinking about retiring. The oddest part of all this is that many companies are in great financial condition today. For many companies, cash balances are higher and debt is lower than they were a couple of years ago. The remedy for corporate America in 2008 was to cut back on expenses, pay off debt and take in more cash than they spend.


 

Last week was yet another emotional roller coaster for anyone who follows financial news, especially for anyone thinking about retiring.


The oddest part of all this is that many companies are in great financial condition today. For many companies, cash balances are higher and debt is lower than they were a couple of years ago. The remedy for corporate America in 2008 was to cut back on expenses, pay off debt and take in more cash than they spend.


Imagine how great it would be if our government followed these simple rules.


Fortunately, the rules are no more difficult for those of you thinking about not working anymore. The problem is that many in that camp cannot really afford to stop working right now, and they don't even know it. The remedy may be the same as for companies: Spend less, earn more, demand a balanced budget and pay off your debt. To make this happen, you need to be aware of the issues and hold yourself accountable for everything in your control.


Too many people are considering retirement without adequate resources. Just like corporate America, if retirement looks a little out of reach for you, figure out how you will cut costs and not downgrade your lifestyle. Are you paying 6 percent for mortgage interest and earning 1 percent on your savings? Perhaps paying off the loan and investing the additional monthly cash flow can help. The same could be said for any credit card or auto loans that are significantly more costly than what you are earning on your savings.


You might want to keep on working past what you considered your normal retirement date. A few extra years of not drawing down on your nest egg can make a huge difference in how long the money will last.  If that idea makes you want to stop reading, consider this: How about finding a really cool job, one that you may love to do forever, even if it means taking a pay cut?


When forecasting your retirement years, consider using a lower rate of return on your earnings to see how that plays out. It does not look as if interest rates will be rising any time soon. Also factor in the possibility of your entitlement payments, such as Social Security and Medicare, being less generous in the future. It seems as if the government has no choice but to cut back or delay entitlement payments so that our country can go back to being one of the most productive nations in the world and not troubled by mismanagement.


John P. Napolitano is the CEO of U.S. Wealth Management in Braintree, Mass. He may be reached at jnap@uswealthcompanies.com.