You can see it coming. Ahh retirement! The time in your life you’ve been looking forward to. You’re supposed to be excited about it, as you should be. But are you really ready? Preparing to retire is kind of like getting ready to go on vacation. Only instead of making sure you’ve packed enough clothes and sunscreen, you need to make sure you’ve ticked everything off of your retirement checklist before the big day. You’ll need to do a little planning and hopefully have things in order such as finances and health care. Retiring should be easy, stop working, pass go and collect your pension and social security.
However, if you’d like to make your retirement as worry free as possible its gong to take more planning than that. It will also require a lot of patience and self-control as you calculate what money you’ll have coming in, plus savings and investments versus expenses like monthly bills and healthcare. Now, the best way to save on healthcare is to stay healthy. If you’re fortunate enough to reach retirement age without any major health issues, you’re lucky. Long term health problems can rapidly drain retirement savings Having the right insurance is key and not just health insurance. You’ll need to account for excess medical costs in your retirement budget planning. When it comes to Life Insurance you’ll need to do some calculations to figure out what you would need to leave behind at a premium that you can afford. Read the fine print and don’t hesitate to shop around.
Timing is Everything
Planning the right time to retire is also crucial to success and peace of mind. Here are some factors to consider. When it comes to Social Security Benefits the difference between retiring at 65 or 66 is almost a full 10% of what you could receive. Unless you have physical problems holding you back, retirement just might be a great time to start your own business. You don’t have to have your eyes set on making millions, even if you make an extra $100 a week making bird houses, it can be enough to supplement one or two bills. This may not sound like much, but every bit helps. Remember, retiring is a lot like gambling, you’re betting how long your finances will last versus how long you will.
Plan and Budget
Pay down as much debt as possible before you retire. Ideally, you want to pay off (or at least down) as much of your larger debts as possible before retirement. Mortgages, credit cards, auto loans, etc., will give you better clarity on how far your retirement dollars are going to go. When planning your time to retire, come up with a long-term plan to get you where you want to be financially when the big day arrives. Stick to a reasonable pre-retirement budget and put as much as you can into your 401 (k) plan, annuities, or other financial investments, without impeding on a decent quality of life.
If you haven’t thought about enlisting the help of a financial planner before, you might want to give it some thought. There is plenty of reference material online to educate yourself with and help you find a qualified financial planner. Many financial planners specialize, so find one that suits your needs. Remember, it’s your money; make it work for you. Good luck and happy retirement!