One thing nearly every working person looks forward to is the day when they can finally kiss the workplace goodbye and retire for good. After all, there is little freedom like that offered by retirement. When the time comes, however, you will want to make sure that you are emotionally and financially ready to retire. There are several things you will want to make sure are taken care of as you approach those glorious golden years.
What Will You Need?
About five years before retirement, you will want to start getting all your affairs in order. First, you should decide what your target retirement day will be, and you may want to redefine what your lifestyle will be like once you’ve finished working. For example, some people decide to take the time after retirement to travel the world, while others may opt to simply stay at home and enjoy the twilight years with their significant other.
Once you know what sort of lifestyle you want to become accustomed to, you will next want to get an idea of what kind of financial requirements that lifestyle will demand. A good rule of thumb is that you will need eighty to one hundred percent of your pre-retirement income in order to live in a comfortable fashion. The longer you plan to live off of your savings, the more you will need to save.
With some luck and foresight, you will have already started your retirement savings plan when you were younger. Now that you are getting close to retirement, you can look at how much you will have versus how much you will need, and adjust accordingly to catch up on your savings.
Between three to five years prior to retirement, you will want to begin to familiarise yourself with the retirement process. Learn what you need to do to retire and what resources you have available to provide assistance and guidance. Often, your employer can help you out with this, but you can also consult local income planning guides and retirement planning seminars.
At this point you will also want to consult with your employer to gain information on what, if any, benefits you may receive after leaving them. Make sure to factor in your spouse’s benefits, if applicable. Your employer or human resources department should be glad to answer any questions you may have.
Make a Plan
From one to three years before you retire, it’s time to begin assembling your retirement plan in earnest. You will want to create a retirement budget, using the information you’ve learned from your employer and what sort of lifestyle you want. You will also want to develop your income stream for your retirement, including knowing what government or retirement options you have. Also learn when you can withdraw money from your retirement accounts and investments without having to worry about tax penalties.
The harsh reality is that many who retire are unable to retire completely. Many seniors work a part-time job to help make ends meet. This is something you can determine by building your plan.
At this point, you will also need to think about your health care in the future. Make a plan for long-term health care, and find out what all of your options are in that regard. You will also want to make sure your life insurance is in order so that, if the worst happens, you will be able to help take care of your loved ones.
Following this advice, you will have a solid plan in place by the time you are ready to take the reins on your own personal freedom. Once you have received your gold watch from your employer, you can then put that plan into action, taking care of the final details a year or less before retirement.
While retirement can be a scary prospect for many, it can also be an exciting time to look forward to. With some careful pre-planning, you’ll be ready to meet the world head on as you transition from your old routines to living the kind of lifestyle you have dreamed of for the last fifty years. You’ve earned your freedom – now it’s time to enjoy every second of it.
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