The Most Important Things To Know When Planning For Your Retirement
More than a third of Americans do not have any plans or funds for their retirement. Currently, as more people are living longer, your retirement could last longer than you anticipated. With the average retirement age around 62 in the US, even starting to save in your 50s can give you a financial buffer for later years.
This post looks at some questions to think about before you retire.
What do you plan to do when you retire?
Before you retire, one thing to think about is what you plan to do when you retire. Will you stay in the same job? Would you like to start a new business venture? If you’re not sure, try thinking about your strengths and interests. What are your hobbies?
Also, think about how much time you want to spend working. Some people may want to work a full-time or part-time job, while others might want to take on some volunteer work or spend more time with their family.
It’s never too early to start thinking about these things! You don’t want an unexpected event, such as an illness, could derail all of your plans for retirement and leave you unprepared.
Are you entitled to any work-related retirement benefits?
As you get ready to retire, it’s essential to think about all the benefits you might be entitled to. If you are fortunate enough to have a pension and/or retirement plan through your employer, you should check into the rules for withdrawing from those accounts. If not, now is the time to set up your retirement plans. Get expert teacher retirement advice if required, or find out your options if you are self-employed.
You might also want to look into your social security benefits and start preparing for how you’ll use those benefits in retirement.
You won’t want to withdraw all of your funds at once. Instead, plan how much money you’ll need each year during retirement, so you don’t run out of money too soon.
Will you have a retirement income gap?
Do you think you will have enough money saved to cover your expenses in retirement? Most experts say you will need to put away around 80% of your current income for each year of your retirement.
The average life expectancy in America is 79 years. So if you earn $100,000 per year, you will need around $80,000 per year in retirement. If you retire at 62, you will need about 1.4 million for your retirement per guidelines.
What is your current health, and will you need support in retirement?
When you retire, you may need assistance with day-to-day tasks. If this applies to you, you will want to be sure your retirement plan considers this.
Do you have a spouse or partner who can help with daily living? What if they pass away or become unable to help on their own? What if this happens in the middle of your retirement? These are all questions that should be contemplated before making final decisions about your retirement.
What about children or grandchildren who live nearby and want to visit? Do they want to come and stay for extended periods? Again, these questions should be considered before deciding on your retirement plan.
What type of care do you currently use, and will it continue after retirement? Getting cost estimates for care now can help make better financial decisions later regarding funding for future care needs.
Where will you be living or wanting to live?
This is a crucial question if you plan to live in your current house. If you plan to downsize, sell your home, and move to a different state, you will need to factor in the cost of moving and any fees associated with this. The same if you plan on moving to a retirement complex or will need assisted living care.
At what age do you want to retire?
The age you want to retire will determine when you need to start saving. The earlier you start, the more time your money has to grow and compound. That doesn’t mean you cannot save later in life, just that your savings will be considerably higher than if you had started at a younger age.
Will you need expert financial advice?
The first thing to consider is whether you’ll need expert financial advice. Different people have different financial goals, so it’s essential to know your retirement goals before deciding if you need an advisor. If your goal is to pay off debt and live a comfortable life after retirement, you may not need an advisor. However, if you want to make investments that will grow over time or are trying to save for retirement early, an advisor can provide valuable information.