Are you thinking about retiring from work? Retirement should be a special time in your life that allows you to spend time exactly how you wish. It can also be a stressful time, particularly when it comes to your finances. With this in mind, keep reading for 5 things that you should do when planning for retirement in order to make the most out of your golden years.
1. Plan How You Want to Live
First, you should think about the kind of lifestyle that you want to lead in retirement. The goals that you have will be key to planning for retirement as they can vary drastically. Some people may be content simply spending more time with family and relaxing at home while others may want to travel the world, invest in real estate or move to an expensive area.
Once you have an idea of what you want to do with your retirement, it will allow you to create a plan and have an understanding of what your financial needs are.
2. Choose the Right Retirement Plans
Following on from this, you should research retirement plans and pick the right one for your needs. Your main options include:
- 401(k)
- FERS
- IRA
- HSA
To choose the right retirement plan, you will find it worthwhile speaking to a chartered federal employee benefits consultant that will be able to help with your retirement planning.
3. Review Health Insurance Options
When you retire, it is important to consider your health insurance options. You do not want to find yourself without coverage, especially in a time in your life where you are more prone to health issues. Those under 65 can use retiree medical coverage, a partner’s insurance policy or coverage through COBRA. If you are over 65, Medicare coverage is an option but you will also want to budget for healthcare costs.
It is also a good idea to evaluate your health at this time and to take steps to improve your health and fitness levels.
4. Take Stock of Assets & Liabilities
Do you know what your personal net worth is? Not many people do, but when retirement planning, this is a key figure that you need to work out. You need to list and calculate all assets, including property, cash, possessions, investments and vehicles. You also need to list liabilities, including mortgages, personal loans, student loans and credit card debt. If possible, clear as much of this debt as possible before retiring.
5. Create a Budget & Withdrawal Plan
With all of the above information, you can then create a retirement budget that will prevent you from overspending while allowing you to lead the kind of lifestyle that you want. You will need to list all of your regular expenses and consider going through these and finding ways to make savings if things are looking tight.
Once you know your income and have a budget in place, you can then create a withdrawal plan to withdraw funds from your retirement accounts (keep in mind that each has their own set of rules).
5 Key Steps Before Retiring From Work
These are 5 key steps to take before retiring from work. Retirement planning is vital before you stop work so that you can lead the kind of lifestyle that you want after a long career.
Check out our other personal finance content today to learn more about preparing for an enjoyable retirement.
