Most people think about retirement planning in terms of preparing to stop working. But what…
Are you planning to retire in the next few years? If so, congratulations! Get ready for a well-earned exit from the daily grind. It’s time to do what you want for a change.
To help ensure your golden years are everything you envisioned, you need to do some basic planning. You’ve been planning your retirement for a long time; now’s not the time to let your diligent planning habits slide. Here are four things you might consider starting to take care of now.
1. Prepare your post-retirement budget. You might not know your income and expenses down to the penny, but you can do some rough figuring. Housing is one of the biggest expenses for many retirees. Will your mortgage be paid off by the time you retire?
Healthcare is another big expense. You’ll need to figure in the costs of Medicare or private health insurance, and expect your healthcare costs to increase in the future.
What income sources will you have? Social Security, pensions, IRAs, and employer retirement funds? Don’t forget taxes. Your IRA withdrawals and pensions may be taxable, as well as your Social Security benefits.
2. Manage your savings. To make sure you have a comfortable retirement, you need to ensure your savings and other income sources will meet your needs throughout retirement. Up to now you may have concentrated on building capital. At this point you might want to consider switching to more conservative investments to preserve your savings. But don’t get too conservative – you’ll always want your savings to continue growing, even in retirement.
3. Think about where you will live. If your home is paid up, you might want to stay where you are. If so, you’ll want to be sure to include property taxes, insurance, and maintenance in your expenses.
But if a different climate or environment sound appealing, now’s a good time to start thinking about a different locale. Research carefully the locations you’re thinking about, talk with people or visit online forums, and actually visit the places on your list, to make sure the reality matches your expectations. Cost of living, climate, safety, activities, and availability of healthcare are all things to be considered.
4. Create your retirement plan. This is perhaps the most important task, and also the most fun. What will you do in your retirement? Finally pursue your dream job or hobby, travel, volunteer, or go back to school? Your plans and goals for your retirement will help drive your income and expense planning. If you plan to putter around the house, you’ll need one set of finances; if you want to travel, attend school, or work, your financial picture will be somewhat different.
Many people find retirement comes with less stress, but also less structure without a 9 to 5 daily schedule. So it’s up to you to come up with a plan to fill the void. Retirement is the time to pursue your interests and visions, and create the lifestyle that’s exactly right for you.