5 Things to do Before Retirement
Use this Pre-Retirement Checklist to get Your Affairs in Order…
If you’re getting older and your retirement is just around the corner, maybe only a couple of years away, you may want to take some time to plan an effective exit strategy. Experts encourage older workers to start planning sooner rather than later. When planning your retirement, you may as well be planning for a vacation, a very long, indefinite vacation. Every detail matters, so you don’t want to leave this to the last minute.
1. Create a Practical Budget
Take a moment to calculate your current living expenses and match those expenses with the amount of income to anticipate receiving in your retirement, such as Social Security. If you find that your expenses exceed your income, you’ll want to address this by drawing down your savings or by using a sum of money from your nest egg to purchase an annuity.
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2. Assess Your Savings and Benefits
Speak with a financial advisor about your 401k, plus any other savings and benefits you may have. You can always punch the numbers yourself as well. Try some of the more popular online retirement calculators, such as those found at Fidelity.com, TRowePrice.com, or TDAmeritrade.com.
Another thing to keep in mind is that when you retire will also affect your Social Security benefits. If you retire at 62 you’ll reduce your Social Security benefits by 25 percent or more, but if you wait until the normal retirement age of 70, you could see as much as a 132 percent boost to your benefits.
3. Pay Off the Mortgage
You don’t want to be burdened with having to pay a monthly mortgage payment. So do your very best to pay off the home loan before you retire, otherwise you’ll significantly lower your expendable income. Remember, you’re on vacation now and you want as much spending money as possible. Experts say before paying your loan amount in full, establish a home-equity line of credit so you’ll be able to access tax-deductible interest money if you need it.
4. Assess Your Potential Health Needs
If you are one of the lucky ones, you may still be covered on your former employer’s health insurance plan. But if you don’t have retiree health insurance benefits, you’ll have to fend for yourself. The good news is that Medicare offers a supplemental Medigap policy and you’ll have access to Medicare Part D prescription-drug coverage. For further information about Medicare coverage, visit Medicare.gov.
5. Review All Insurance Policies and Needs
Older people don’t necessarily need life insurance. Especially, if their kids are grown and the house is paid off. One insurance policy you may consider buying for retirement is long-term-care coverage, protecting you against the biggest threat to your retirement nest egg.
Related Information
Top 10 Ways To Prepare For Retirement
Top Ten Financial Tips – Keys to Financial Success
Retirement Investing: Tips for Creating the Proper Asset Allocation
Retirement Planning Tips for Singles
401k and Retirement Tips for College Grads
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Tags: 401k, Benefits, Budgeting, Fidelity.com, Insurance, Medicare, Medicare Part D, Medigap Policy, Retirement Plan, Social Security, TDAmeritrade.com, TRowePrice.com, USAA
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[...] emergencies and paying off debt. Does your spouse think about retirement planning? Check out this pre-retirement checklist to help get your affairs in [...]