Retirement is something many of us look forward to; it’s the reward we get from working hard our whole lives. When it comes to preparing for retirement though, there are several factors we need to consider to make sure we’re on the right track. Whether your plan is to travel the world, spend your days on the beach, or stay close to your loved ones, it’s important to be prepared. Here are some questions to ask yourself to ensure your retirement plan is sound.
What are my goals for retirement?
Most people have an idea of how they’d like to spend their retirement but don’t have solid goals in place or an idea of the concrete steps required to achieve them. Take some time to evaluate what your retirement needs are. What are some goals you’d like to accomplish during your retirement and what do you need to do to achieve them? When thinking about your goals, try to make them as specific as possible. That way, it’s easier to allocate funds specifically for those goals when creating your retirement budget. The more specific your goals are, the easier it is to make your financial plan work towards achieving them.
Do I have any health concerns preventing me from a relaxing retirement?
As you approach retirement, it’s essential to be your healthiest self. Stay up to date on preventative medical care discuss any concerns with your doctor, and receive tips on how to maintain a healthy lifestyle. Committing to eating healthy and getting the proper amount of exercise your body needs is essential, especially if your retirement goals include traveling. Taking the dog for a walk around the neighborhood or eating an apple as your afternoon snack are easy changes that can go a long way in improving your health.
When should I start collecting social security?
When it comes to money in retirement, most people prefer to have financial freedom. Although this is the objective, it’s not the reality for many retirees. Most will need to take advantage of their social security benefits. The age you decide to start receiving your social security benefits directly affects the amount you receive monthly. More simply put, the longer you wait to claim your Social Security, the better. If you draw from your benefits as soon as they are available, you lose the opportunity to receive more money each month if you draw from them later. For example, if you decide to collect your benefits four years earlier, you can expect to collect about 25% less each month than if you had waited. To get the most out of your social security benefits, it’s worthwhile to take some time to understand the ins and outs of collecting, determine when you should collect your benefits, and how it can help you throughout your retirement. A reverse mortgage can allow you to defer drawing from your social security by providing financial support. While you allow your other retirement assets to grow, you can live off the proceeds from a reverse mortgage or live off the amount of money you are saving by not having to pay a monthly mortgage payment. Just remember, you are still responsible for paying property taxes and insurance.
Do I have a budget?
Especially when preparing for retirement, it’s important to know your monthly expenses and income. Your budget should include how much money you have coming in, any debt you have, and how much is needed to achieve your goals in your retirement plan. Simple budgeting tips include keeping your budget simple and easy to follow, customizing it to your preferred lifestyle, and preparing for unexpected expenses. Also, try to identify areas in your budget where you can save money. Even making small changes in your expenses, like making coffee at home rather than going to the coffee shop every morning, can make a big difference in the long run.
If you find yourself unsure on any of your answers to these questions, you’re not alone. Thankfully there are options available and resources to assist in planning your retirement. It is wise to reach out to your financial advisor to develop a thorough plan that sets you up for success. Remember: the earlier you start planning, the better prepared you’ll be for a relaxing retirement.