Are You Prepared For Retirement? 10 Things to Consider Before You’re Ready to Retire

Prepared for retirement

Each day, approximately 10,000 Americans leave the workforce and officially retire.

Soaking in the sun on a beach to celebrate is great. But without a good plan in place, how will you make sure you can get there?

Before you plot your escape from your career, you’ll need to make sure you’re prepared for retirement.

In this guide, we’ll take a look at the most important steps to take to set yourself up for a successful and relaxing retirement.

1. Look at Your Income

You know how much money you make in your job. But once you retire, that steady paycheck will be a thing of the past.

Start thinking about where your retirement income will come from. Do you have investments? Have you contributed to a retirement savings account?

Each of these things will give you some form of retirement income. But that amount may not be what you’re used to.

Start estimating how much money those accounts and investments will generate each month. Then, compare that amount to your current monthly income.

If the numbers are close, your lifestyle won’t change much once you retire.

If they’re not, start thinking of ways to grow that income. If possible, start putting more money away each month until you retire. You can also start looking into new investments that will grow future income over time.

2. Establish a Budget

Now that you have a good idea of your monthly retirement income, you need to establish a budget.

Start by looking at your fixed expenses. These include mortgage payments, auto loans, credit card bills, and utilities.

You’ll need to cover these bills every month whether you’re working or not.

Then, consider the things you want to do in your retirement. Are you hoping to travel to a foreign country several times a year? Do you want to treat your spouse to fancy dinners each week?

These activities influence how much money you need to budget for throughout retirement.

This doesn’t have to be a fixed number and it can change over time. But it should give you a rough idea of what to expect.

3. Figure Out Where You’ll Live

Sometimes, staying in your hometown means paying for a higher cost of living. Without a regular paycheck, this can be tough.

For many retirement-age people, relocating to a different state with lower income tax rates can help extend their monthly budget and their retirement savings.

But if you plan on moving, you need to start planning that move as soon as possible. Look at towns that have properties you can afford and offer amenities you’ll enjoy using.

If you plan on staying in your hometown, start thinking about whether or not you plan on staying in your house. Downsizing can save you money on utilities and help you stay in your house longer.

Any move takes time and money and the sooner you start preparing, the better off you’ll be.

4. Consider Your Investments and Focus on Growth

Part of retirement planning is making sure you have a reliable source of income. And your investments should be a major income source.

As you approach retirement, make sure your portfolio can grow your investments. Playing it safe and investing conservatively won’t always give you the money you need.

If you’ve been handling your own investments, start working with an experienced financial advisor to grow your assets.

They’ll be able to look at your current portfolio and find a way to balance risk with safe investments to minimize loss without eliminating the potential for growth.

Once you retire, stay proactive. Meet with your financial advisor to see how your assets are growing. If they’re not, don’t be afraid to change your strategy.

5. Inspect Your Retirement Savings Accounts

If you’ve paid into retirement savings account like a 401(k) or IRA, start looking at the money you have.

You can start taking payments from retirement accounts when you turn 59 ½. If you decide to withdraw funds earlier than that, you’ll be subject to a 10 percent penalty.

If you’ve been drawing heavily on your retirement accounts before reaching retirement age, try to find a way to build that balance up.

The more money you have saved for retirement, the more comfortable you’ll be.

6. Think About Health Insurance

As you age, healthcare becomes even more important than it was while you were working.

You’re eligible for Medicare and Medicare supplement policies after age 65 and these policies differ from standard health insurance.

Start looking at your options now and speak with a Medicare specialist to figure out which options will work best for your needs.

The last thing you want to do is retire only to find your healthcare costs too expensive to cover.

7. Pay Down Debts

Existing debts can extend into your retirement years. But the more you pay down before retiring, the more money you’ll have to spend on things you enjoy.

When planning your retirement, start paying down as many debts as you can. Get rid of credit card payments. Sell your house and purchase a smaller home after paying off the mortgage. Refinance debt that’s become too high.

The lower your debt is, the better off you’ll be.

8. Create a Retirement Strategy

When you decide to retire, it’s tempting to take the leap immediately. But doing so can leave you re-entering the workforce a few months later.

Instead, take the time to create a retirement strategy. Consider how long you need to work before you can start taking from your retirement funds.

Remember, it’s never too late to start planning your retirement. Even if you’re close to retirement age, start making a plan as soon as possible.

This will take much of the uncertainty out of the process and helps your family better prepare for those changes.

9. Don’t Neglect Life Insurance

Life insurance policies protect your loved ones from financial hardship when you pass away. The funds can be used to cover funeral costs, establish inheritances, and even be donated to charities.

Though many older people opt out life insurance policies once their children can support themselves, it’s not always the best option.

Make sure your family has the money they need to pay funeral costs, medical bills, and any other debts by purchasing a good life insurance policy.

10. Get Help

The most important step in planning your retirement is knowing when to ask for help.

If you’re worried about being prepared or need a bit of help deciding what you need to do to set yourself up for success, meet with an experienced retirement planner.

Make Sure You’re Prepared for Retirement

Making sure you’re prepared for retirement before you leave your career will make your retirement that much more relaxing. Schedule an appointment with a financial advisor today.

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This material was prepared by an independent third party. Guardian nor any of its subsidiaries offer Health Insurance or Medicare.

Luke E. J. Will

Luke E. J. Will was born and raised on a farm in Watertown, WI. His values and ideals were shaped by his hardworking family and are embedded into the relationships he builds with his clients. Luke has built Navigation Wealth Management with Kurt Zipp to deliver the “Navigation Way” of financial planning and asset management to his clients from all walks of life. The “Navigation Way” is built upon Trust, honest conversations, and understanding his clients financial goals.Luke attended the Wisconsin School of Business at the University of Wisconsin-Madison, where he earned his Bachelor’s degree in Finance, Investments & Banking.His favorite hobbies are hunting and fishing with family and friends. He is loves spending time outdoors including snowboarding, skiing, kayaking, and camping while spending any extra hours with his family, watching all the sports teams in Wisconsin play. Traveling, music concerts, and reading are few other interests.

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