Are you ready for retirement? While you may be anxious to coast out of the workforce, your finances may not be as prepared as you are. Here is important and practical advice for managing your money and preparing for retirement.
Table Of Contents
Before you retire, you should have a good idea of whether your finances will meet your needs. One suggestion is to create a budget based on the lifestyle you expect to enjoy during your retirement years. While some of the numbers are likely to change over time, you can estimate amounts to gauge whether you could comfortably meet your obligations. Be sure to include housing, taxes, vehicle expenses, utilities, and so forth. If you intend to travel or participate in other hobbies, you should include appropriate numbers in your calculations. Part of your planning will depend on how much you save toward retirement and how many more years you expect to work before retiring. You can use an online retirement calculator tool to help make your tallies. Remember there are many factors that affect finances, such as inflation and the economy. While there are no guarantees on the totals, it can help you make good decisions.
Many people do not realize how their Social Security benefit is computed. Basically, the longer you wait to retire, the bigger your benefit will be. You gain the most by putting off retirement until age 70, which earns roughly a third higher benefit. There is no benefit to waiting beyond age 70. It’s important to understand that retiring early will reduce your payout, as US News & World Report explains. You lose benefits retiring prior to your full retirement age, which for most workers is around age 67. Married couples receive additional benefits. Ex-spouses can also receive benefits if the marriage lasted 10 years or more. Of your two incomes, you can claim your own benefit or up to 50 percent of the higher earner’s benefit, whichever is more. If the higher-earning spouse passes before the other, the survivor may also be eligible for a survivor’s benefit. If you are unsure, the Social Security Administration offers a retirement estimator to help you understand your benefits better.
You may be willing to take the hit and retire early. Maybe you have health issues and are concerned that waiting will mean enjoying your retirement less. Several other factors weigh into your decision as well. You may be able to retire early if the stars — and your numbers — align. For instance, if you’re debt-free and have substantial savings, early retirement may be a no-brainer. Also, some retirement plans don’t have any penalty for early withdrawal. Tally your totals before deciding.
Starting a Business
Just because you’re retired doesn’t mean you have to stop working altogether. In fact, many people discover that retirement offers the perfect opportunity to start the business they’ve always dreamed of getting off the ground. Although there are certainly many options you can explore, one of the easiest involves eCommerce. With a great product, a website that allows for easy navigation and payment, and a business plan that involves dropshipping (which prevents you have from having to find a place to house your inventory), you can get started in a relatively short amount of time. Of course, just because it’s easy to get things rolling doesn’t mean you won’t have to put in some hard work to keep your business afloat.
You should review your life insurance policies going into retirement; in some situations, it can benefit you to settle a policy. Whole, universal, and convertible term policies are all potential candidates for a life settlement. Several factors will weigh into your decision, such as your current health status, your financial situation, and the timing on your policy. Also, policies should have a face value of $100,000 or more to consider settling. You should discuss your circumstances with a financial advisor to determine if it’s worth settling a policy or keeping it.
Decisions And Criteria
When making your calculations and determining timelines and benefits, you should carefully weigh your priorities going into retirement. As Kiplinger explains, you need to evaluate your situation and expectations. Are you currently healthy and expect no restrictions going into your later years? Do you want a quiet retirement, enjoying grandchildren and nearby parks, or are adventures in Europe and ski resorts more your style? If you’re married, your spouse’s needs and desires also weigh into your decisions.
A number of factors should factor into your decision to retire. Learn all of your numbers and make calculations based on your needs and desires. Prepare wisely, time things carefully, and make smart choices so your retirement can be the best years of your life.