Planning for your retirement is best done before you officially retire. There is a lot to consider, with life-long ramifications. But don’t worry! Taking a slow-but-steady approach to retirement planning ensures you have plenty of time to think about every angle and make the best decisions for your needs.
Here’s what you should consider when it comes to preparing for your retirement before you actually retire.
Any discussion of retirement planning needs to cover the financial realities of no longer working for a living. Without those steady paychecks rolling in you’re going to need some other way to pay the bills, after all! There’s a lot to unpack when it comes to retirement savings and income, so let’s waste no time jumping right into it. Here are three suggestions to consider.
1. Understand Benefits like Social Security
Reaching retirement age means being able to access Social Security. You’ve been paying in all your life with every paycheck, so it’s about time you get to reap the rewards of making all those contributions, isn’t it? You can access Social Security starting at age 62, but there are a number of instances where your benefits might be reduced, such as if you continue working or if you have a government pension. Also, Medicare premiums and state and/or federal taxes may be deducted from your payments as well. You may earn more money per check if you delay, but is that worth it to you? Be sure you understand your specific circumstances if you’re planning on relying on those benefit payments.
2. Understand how Medicare and Other Medical Insurance Works for Retirees
Medical care for retirees is crucial. As we age, our bodies change, and the medical needs we have today can advance tomorrow or the next day. Medicare is a complex system, and while Medicare Part A is typically free from cost, Medicare parts B, C, and D often carry premium costs. You’ll need to ensure you have the resources to pay those premiums if you need the coverage that these supplemental Medicare plans require. This will be specific to your particular needs when it comes to medical care, but it’s an important thing to consider, to say the least.
3. Review Your Retirement Savings and Income Streams
It’s never too late to start saving for retirement. Your choices might include any or all of these types of savings vehicles:
- A 401(k)
- Some other employer pension plan
- A personal savings account like an IRA
- Any other type of investment
However you choose to save, beginning before you move on to greener pastures will help you live a happy, healthy retirement without having to worry about expenses. Every little bit helps, so don’t hesitate to consult a financial adviser today to begin planning out your retirement savings or income ahead of time.
Click to read How Much Money Do I Need to Retire?
Beyond Money Concerns
Readying yourself for retirement does require a lot of financial planning, but that’s not the only thing you need to take care of before that last day of work. Retirement planning goes far beyond money concerns, as your way of life is going to change on a fundamental level once you “punch that time clock” for the very last time. In fact, many new retirees struggle with these changes more than they do with any financial changes. Here are three things you need to keep in mind.
1. Your Schedule Will Change
You’ve been working steadily for a very long time. Doing the whole nine-to-five routine five days a week, 50 weeks a year, for decades, leaves a mark on you whether you know it or not.
Taking away the scheduled routine you’ve grown used to for years can be more than a little disruptive at first. Not having to get up and go to work every day can leave you feeling listless and confused, and many retirees struggle to acclimate to the new normal, to find their daily purpose. As a result, filling your new free time becomes a major goal.
2. Is It Time to Take Up a Hobby? Sources Say Yes
Because you have all this sudden free time, it’s likely you’ll feel compelled to find something to fill it with. This is the perfect time to take up that hobby you’ve always wanted to, or to finally devote enough time to an existing interest. Not only will this give you some structure to your days, it will also provide you plenty of opportunities for enjoyment and growth.
Almost any hobby is a great idea; whether you’ve always wanted to learn to paint or draw, learn yoga, take up woodworking, or tend to your flower garden, now is the time to do so – and to enjoy yourself.
Looking for new, interesting hobbies to enjoy with your partner? Read this article listing Retirement Hobbies for Couples. Spoiler: you don’t need to be in a relationship to enjoy many of these hobbies; grab a friend, a family member, or just enjoy them by yourself!
3. Get Out of the House and Into the World
Finally, retirement means being able to go where you want and when you want, without answering to anyone else. Use this opportunity to get out of your house and out into the world!
Take leisurely drives through the countryside, either around the corner or across the country. Visit friends and family that you never got to spend time with while you were working. If you can afford it, take the grand kids to Disney World; if you can’t, take them to the movies. Whatever you decide, the act of getting out and enjoying your life is what’s important. Don’t forget: you’ve earned it!
Want to travel but feel like you can’t be away from your home for too long? Why not consider selling it? For advice on home ownership read the article Should I Sell My House When I Retire?
The Final Word on Retirement Planning
Retiring from the workforce after a long career can be both daunting and exciting. Preparing for your retirement is best done well beforehand, but there’s no bad time to begin this retirement planning process; what’s important is that you do it in the first place.
Whether it’s managing and reviewing your investments and other resources, or it’s planning all the activities you want to do once you’re not a slave to the time clock any more, you’ve got the adventure of a lifetime awaiting you. Take the time to plan it right and you’ll be in the best position to enjoy your retirement to its fullest.
For more information on retirement, read these articles by Acts Retirement-Life Communities: