It’s so important that you follow the appropriate steps to financially, mentally and emotionally prepare for retirement. Doing so will help ensure that you have a smooth transition into the next big step in your life. Follow the steps outlined below to make sure you’re as prepared as you can be to enjoy your time away from work!
Determine What You Need:
As a first step, you should sit down and evaluate your financial goals to make sure you’re on track to meet them. At a minimum, you need to have enough money saved so that you can annually withdraw funds to cover all your expenses. In addition, for each year of retirement, you also need to have enough additional money available to keep up with inflation. Beyond the basics, if you plan to travel or if you have additional medical costs, you’ll need to account for expenses related to these things as you work out the math.
Consider Your Housing Situation:
If you already live in your perfect retirement property, consider prioritizing paying off your mortgage so you own your home outright. Alternatively, if the home you live in is too large to suite your retirement lifestyle, you can downsize to a smaller home. Doing so will not only allow you to pay off any outstanding debt on your current property and to buy a smaller property outright, it may also give you some extra cash to stash in your retirement fund. Downsizing doesn’t just save on monthly mortgage payments, it also saves you on costs associated with ongoing maintenance and upkeep. If you are thinking about selling, learn how to avoid a common retirement pricing mistake that can cost you big time at closing.
Boost Your Savings:
In addition to downsizing your property, there are a few other easy ways you can boost your retirement savings quickly. First, consider selling any assets you own but don’t use. For example, if you own a boat and pay maintenance costs on it but hardly ever use it, think about whether you’d be better off selling it and adding the profits to your savings account. Also, focus on cutting back on small, superfluous purchases and hone in on paying off high-interest debt to reduce wasteful spending. Once your debt is paid off, simply start making larger monthly payments into your retirement fund each month.
Check Your Health:
Whatever you do, don’t wait until the last minute to schedule a pre-retirement doctor’s appointment. Instead, schedule visits several months out, while you still have coverage through your employer. This is especially important because you may have to switch doctors if you’re forced into another insurance plan. Take advantage of your existing relationship with your health care providers and make sure you have a clean bill of health, that all your prescriptions are current and available and that any pre-existing conditions you have are being effectively managed before you head into retirement.
Learn About Retirement Programs:
There are a number of programs available to retirees that you should research before you need to start using them. For example, if you plan to supplement your retirement income with Social Security, you need to find out the details about when you can start withdrawing and how much money will be available to you on a monthly basis. Usually, the longer you wait to draw from social security, the more money you have access to each month – but you’ll have to Work with a financial planner or family member and research various retirement programs to make sure you understand all the benefits and limitations of each. Also, be sure to look into medicare and state insurance options or any other social programs you’ll be utilizing as a retiree.
With a little planning, you’ll have all your ducks in a row and will be able to live comfortably when the time comes to enjoy your retirement.
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