9 Things to Plan Before You Retire
Retiring isn't something you do at the spur of the moment. It requires careful planning as you ensure you have adequate resources to cover your expenses. Consider these nine tips that help you plan a successful retirement.
- Build Your Emergency Fund
Ideally, you should save three to six months of living expenses into an emergency fund before you retire. This money gives you peace of mind in case your income is delayed, you face a medical crisis or another emergency occurs.
- Write an Income Timeline
Pensions, social security and retirement accounts may all be accessed at different times. Write the details on an income timeline as you manage your cash flow.
- Write a List of Expenses
It's easy to underestimate the amount of money you'll need after you retire. Get accurate figures when you create a list of your expenses. Remember that some expenses change. For instance, your commuting expenses will disappear, but your home electric bill might increase.
- Use a Social Security Benefits Calculator
With a social security benefits calculator, you can figure out when you should start taking distributions. This tip allows you to maximize your income and reduce any tax penalties during your entire retirement.
- Ask About Retirement Income Taxes
Your retirement income will be taxed at varying rates. Take time to figure out the tax details to ensure you get an accurate view of your income. You don't want to count on a certain amount and fall short because of your tax obligations.
- Research Health Insurance
Many retirees rely on Medicare, but it doesn't kick in until you turn 65, and it only covers half of your medical expenses. That means you need to research other options and calculate them into your budget.
- Create a Budget
Once you know details about your retirement income and expenses, create a budget. It assists you in determining if you need more income or fewer expenses as you fund your entire retirement.
- Make an Investment Plan
Even though you're retiring, you still need to manage the money in your 401(k) and other accounts. Learn about your options as you decide how much to invest, when to take distributions and other details of your investment strategy.
- Interview Retirement Planners
A professional retirement planner assists you in managing the details of your retirement. Look for one that will take time to understand your needs and shares your vision for your retirement.
Retirement is something to anticipate. For more details on how to plan your retirement, talk to your HR manager or financial advisor. Plan now to ensure your retirement is the best it can be.