For some people, a secure retirement means freeing themselves from work so they can spend more time with their families, work on their gardens, or visit the golf course more often. For others, it could mean transitioning from an 8 to 5 job to restricting themselves to part-time work.
Regardless of what you intend to do, to have a happy and comfortable time, you need to set up the financial base that will support you after you retire. Here are 7 steps that will help you in getting ready for retirement.
1. Draft a Plan and Write It Down
Even if retirement might seem a bit far away, it pays to create a plan that you intend to implement to secure your future. The plan should indicate an estimate of where you stand financially and how you intend to meet your goals. It should also indicate what you intend to do during retirement as per certain factors such as your health, environmental circumstances, or personal preferences.
2. Outline Your Expenses
Retirement is expensive especially considering that you won’t be working, meaning that you’ll no longer have any practical income. Will you maintain a similar standard of living once you stop working? Will you upgrade or will you downsize? Certain expenses such as healthcare or commuting will have an impact on your plan.
3. Define Your Potential Sources of Income
You need to take stock of what you are likely to own after you retire. This involves requesting bank statements from your retirement and savings accounts. Retirement means you’re going to have a lot of time on your hands. It’s never too late to finish that book or teach music lessons. Capitalize on the skills and hobbies you enjoy doing to make you a bit of money to help you get around.
4. Inquire About Your Employer’s Pension Plan
If your employer has a pension plan or retirement savings plan such as a 401k, you need to confirm whether you’re covered. If not, sign up and contribute as much as you can. You’ll pay fewer taxes and the fact that the deductions will be automatic will make the contributions a lot easier.
5. Better Your Financial Status
Your financial state will have a direct impact on how ready you are for retirement. You need to analyze the process by which you make and manage your money so you can improve your financial health. This would involve taking measures such as reducing your spending.
6. Learn More About Your Social Security Benefits
Social security is a convenient way of supplementing retirement income when your savings aren’t as good. As early as 62, you’re eligible for full benefits from social security but it’s not a good idea since the monthly pay-outs you receive will be lower than if you filed for benefits at 66.
7. Hire a Financial Advisor
Financial matters can prove to be very complex especially when getting ready for retirement. A financial advisor can help you navigate the financial issues that come with the whole process. They have the expertise to help you plan your money, investments, or protect your estate so you can pass it to your children or any other beneficiaries.
Saving is Important
Financial security after retirement takes dedication and planning. It literally pays to be prepared for retirement so the sooner you begin, the better. Begin saving now and you’ll give your money enough time to grow. It’s never too early to start!