Additional Coverage:
- 12 Essential Moves to Make When You’re 6 Months From Retirement (financebuzz.com)
Ready for Retirement? 12 Steps to Take Before Your Final Working Day
Retirement. You’ve spent your working life preparing, diligently saving in your IRA or 401(k).
Now, it’s almost here. While exciting, the transition can also be daunting.
Are you truly prepared to live on a fixed income? Here are twelve steps to ease your mind and ensure a smooth transition.
1. Maximize Retirement Savings: Before leaving your job, make the most of employer-matching funds.
Review your current contributions to your 401(k) or other employer-sponsored plan. Can you increase contributions in these final months?
Even small increases can make a difference.
2. Eliminate Debt: Entering retirement debt-free is ideal.
Prioritize paying off credit cards and personal loans. For larger debts like mortgages or car loans, ensure these payments are factored into your retirement budget.
3. Avoid Big Purchases: Resist the urge for last-minute splurges.
That new car or dream vacation can wait. Redirecting these funds into your retirement savings will benefit you more in the long run.
4. Understand Social Security: When you start collecting Social Security significantly impacts your retirement income. Use the Social Security Administration’s online calculator to estimate your benefits based on different start ages.
5. Maintain an Emergency Fund: Unexpected expenses happen.
A robust emergency fund protects you from relying on credit cards in retirement. Ensure yours is adequately funded before your last working day.
6. Explore Long-Term Care Insurance: Consider a long-term care policy to help cover potential future healthcare costs.
Policies are generally more affordable when purchased younger. Compare providers and coverage options to find the best fit.
7. Review Your Investment Portfolio: As retirement nears, reassess your investment strategy. Diversify your portfolio and shift away from high-risk investments to protect yourself from market volatility.
8. Evaluate Your Housing: Downsizing or relocating to a lower-cost-of-living area can free up significant funds in retirement. Factor in upkeep costs when assessing your current and future housing needs.
9. Refine Your Retirement Budget: Review your estimated retirement budget as your retirement date approaches. Fine-tune it based on current expenses and anticipated future costs.
10. Assess Your Assets: Take stock of your retirement savings and other income sources. Consider consulting a financial advisor to analyze your current financial standing and plan for the future.
11. Consider a Side Hustle: A side hustle can provide extra income or simply keep you engaged during retirement. Explore opportunities that align with your interests or skills.
12. Plan for Leisure: Retirement is also about enjoying yourself!
Include leisure activities, hobbies, and travel in your budget. Remember, enjoyment comes at all price points.
Planning for retirement involves more than just saving. By taking these steps, you can transition smoothly into this new chapter and enjoy your well-deserved retirement.
Read More About This Story:
- 12 Essential Moves to Make When You’re 6 Months From Retirement (financebuzz.com)