6 Quotes from Shark Tank's Kevin O'Leary That All Retirees and Pre-Retirees Should Read

To fans of the television show Shark Tank, Kevin O'Leary is familiar, as he's a panelist on the program that showcases business ideas. He's a Canadian entrepreneur, who started the Softkey Software Products company. It saw great success and later bought the Learning Company, before being bought itself by the toy company Mattel.

O'Leary has ideas not only about entrepreneurship, but also retirement -- so check out some of his thoughts on that and see whether they might help you in your own retirement planning. They're chiefly drawn from his 2012 book, Cold Hard Truth on Men, Women and Money: 50 Common Money Mistakes and How to Fix Them.

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Debt and retirement

If you're carrying any debt, especially high-interest-rate debt (such as debt from credit cards), it's a good idea to pay it off or shrink it considerably before retiring. O'Leary notes: "If you're heading toward retirement with debt, now's the time to budget like you've never budgeted before. I mean it."

Paying down debts will free up more income that you can live off in retirement -- and it can give you more peace of mind and help you sleep better, too, if you don't have big mortgage payments or hefty credit card bills hanging over you in your golden years.

Your post-retirement income

O'Leary questions one common rule of thumb -- that retirees should plan to need 65% of their pre-retirement income in retirement -- saying:

This assumes that you will want to maintain roughly the same standard of living that you enjoyed when you worked a stressful life, working 40 hours a week away from home... Of course, you ate out a lot, bought hardcover books to read on the subway, and got a brand-new coat every winter... But in retirement, you won't need to finance your lifestyle in the same way. There will be no commuting, fewer lunches out, and lower dry-cleaning bills.

Still, he notes that each of us should be trying to come up with the most realistic estimate of how much we'll need in retirement instead of relying on any one rule of thumb: "If you don't think you can go days without spending money on useless crap like magazines, gum, or coffee, then you're going to be in trouble a few years into retirement..."

For context, know that as of March, the average monthly Social Security retirement benefit was $1,997 -- about $24,000 for the year. Of course, if you earned more than average, you'll collect more than average. (To get a good estimate of how much you can expect from Social Security, set up a my Social Security account at the Social Security Administration (SSA) website.)

So if you end up estimating that you'll need $80,000 annually in income in retirement, figure out how you'll get that. Here's what such a retirement income plan might look like:

• Social Security: $30,000
• Dividend income: $25,000
• Pension income: $15,000
• Selling off part of your stock portfolio: $10,000

It's good to have multiple income streams for your retirement, and yours could look different from the example above. You might, for example, have rental income or annuity income, or income from a part-time job.

Save more, spend less

If we want to be able to afford the retirement we hope for, O'Leary offers some good advice: "...[S]pend those last few working years socking away as much money as you can, but also use those years to practice living on a lot less, lowering your expectations, and cultivating disciplined spending habits..."

He also says: "Get a part-time job, too, while you're at it and while you're still spry enough to handle it." It's smart to save aggressively, and you might be able to do so now by shrinking your spending -- and perhaps by getting a side gig for a few or many years.

Also consider coming up with a household spending budget. Using a budget in retirement is a smart move, too, as it can help you not spend more than you should. You may even keep a part-time job for your first few years of retirement. Here's how your savings might grow over time:

Data source: Calculations by author.

When to retire -- and when not to retire

So -- when should you retire? O'Leary has a perfect answer: "Don't retire until you can afford it. Throw out your plan for freedom at 55 or even 65... If you have debt, you need your job, so you have to do everything in your power to keep it."

Only retire when you can afford it. Make sure you've set up a portfolio that you can draw on or collect dividends and/or interest payments from. Make sure you've set up sufficient income streams to support you in retirement. Keep inflation in mind and prepare for it. Don't forget healthcare costs, either, as they can be substantial. Finally, know that there are ways to increase your Social Security benefits.

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Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.