6 Steps to Take When You’re Getting Ready to Retire
After years of service with a company, there comes a point when it’s time for retirement. Taking the next step into retirement may seem like a scary prospect, but if you plan ahead accordingly, you and you family will be able to settle into the retirement lifestyle easily. It’s essential to make sure everything in your finances is ready for this new stage in life. Here are six steps to take when you’re getting ready to retire.
1. Enroll in Medicare
The first thing that many people considering retirement think about is their health coverage. Some jobs offer lifetime health insurance coverage at retirement, but many do not. Many individuals who have retired are eligible for Medicare coverage. You can find out the process for applying for Medicare Part A or Part B and see what kind of health benefits you qualify for. Knowing what to expect ahead of time can help you budget for your future healthcare costs.
2. Find Out About Social Security
Another part of your retirement financial plan is Social Security. Those who were born between 1943 and 1954 are eligible for full benefits once they turn 66. Retiring before age 66 means they’ll only get a portion of the Social Security benefits. Starting with those who were born in 1960 and later, the retirement age increases to age 70 to get full benefits. Those who are disabled may be able to get full benefits before reaching retirement age if they have shown to be incapable of working.
3. Set a Budget
Next, it’s essential to set a budget so you have enough financial resources to last for the rest of your life. Most experts recommend you’ll need about 70 percent of your working wages to maintain the same type of lifestyle during retirement. Most retired workers save money in taxes because of the lack of payroll taxes and reduction in tax rate due to the new status as a retiree. You’ll also have to plan for additional costs in health care as you age.
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4. Talk to an Expert
Before starting this new stage in life, it’s also a good idea to have a consultation with a financial advisor or expert. This way, you can plan more effectively to make your retirement enjoyable instead of stressful. Financial advisors should have expertise in accounting, such as an advanced degree in the subject from a reputable program, like Maryville Universiy.
5. Discuss Your Pension
If your company provides a pension for you upon retirement, before your last day of work arrives, make sure you schedule a meeting with a benefits advisor or other human resources professional in your company. You want to get more details about how your pension will be paid out to you and what happens to your pension if you die. You can also get advice about how taxes will be taken out of your pension during the course of your retirement.
6. Look Through Your Investments
Finally, the last thing that a newly retired person should think about is how to start getting payments from your investments. If you have an individual retirement account, you may be able to receive payments with little or no taxes. Other types of investment accounts may take a portion of your money to cover taxes. This is the main source of income for a large percentage of the population, so it’s important that you saved enough money to cover your retirement expenses over time.
Enjoying your golden years is possible if you took the steps for a great financial future. When you’re ready to leave the world of work forever, make sure you have all of your financial ducks lined in a row. The combination of a pension, retirement savings, Social Security, and Medicare can help you maintain a vibrant and active lifestyle.
