After decades of working and saving… Retirement is approaching. Whether that date is 5 or 10 years down the road, you need to decide what you want the years after retirement to look like. Let’s explore some steps to help in the planning.
- What is your desired retirement age?
- For some people that magic number of 65 is a goal they have. Many reasons include wanting to travel, volunteer, or spend time with family – especially grandchildren. For others, especially the self-employed, they tend to push their retirement date down the road, choosing to stay active on the business they built.
- What are your sources of income at retirement?
- The obvious sources include social security, pension plans or other retirement accounts. If these accounts are what you are planning for your expenses, some steps to take while you are still employed might be to increase your contributions in your 401k, IRA or other qualified accounts to the maximum. Also try to decrease debt… paying down houses and other financial responsibilities prior to retirement.
- How will inflation affect my retirement savings?
- It is important to think about inflation and adjust your savings and investment strategies. A well-balanced portfolio with a mix of stocks, bonds, mutual funds and other assets that fit your risk tolerance and time horizon is important in order to get the income you need for the lifestyle you want.
- What additional expenses will I have in retirement?
- Health care is a big issue to plan for after retirement. If you worked for a company that included health care benefits paid for partially or full coverage you may have not had to figure out that expense. There is no perfect plan but be sure you talk to someone prior to retirement about your options. Items like monthly premiums, co-pays, prescription costs – all need to be part of your budget.
- Long Term Care Planning?
- We are living longer, therefore the need to plan for the years when you may need help with everyday chores and care should be addressed. Many people at retirement still have the home they may have bought early in life and raised a family in but now find the need to downsize. This is sometimes a good thing for a number of reasons. Places for those over the age of 55 are becoming popular in many communities. It is a chance to meet people your age with many opportunities for get togethers and outings to explore. Selling your home often gives you proceeds that become another source of income for you.
My tidbit this month is, it is never too early or too late to make a plan for those retirement years, so that you can enjoy those golden years.