Is retirement around the corner for you? Have you worked hard for many years and believe you’re ready for time off? Before you say yes and hit the “retirement button,” there are some things to think about before you actually go to retire.
Your finances are an important part of knowing if it’s time to quit working, so before you decide to call it quits, consider these details before you make the jump into retirement:
Take a look at your financials
One of the most important factors in retiring when you want to is having financial stability. You may want to know, “How much do I need to retire?” Have you taken time to go over your current financial health? Is it enough for the kind of lifestyle you want to live once you’ve stopped working? If you’re like most people, you may have some retirement plans you’ve been looking forward to having some money for, besides the typical expenses you need for living.
Consider healthcare costs
As we get older, our healthcare expenses typically go up. Whether you have a condition that requires continuous treatment, or you need pricey medication to manage an illness, healthcare is important as we get older. If you’ve been paying for expensive health insurance, you may be just fine getting Medicare if you’re over 65.
However, Medicare is great for some issues but may not work for everything. Beyond health insurance, think about your later years of life. While we don’t want to think about needing to live in a care facility, as you get older, it may become necessary and is a considerable expense.
Consider housing expectations
How is your current housing situation? Are you done paying off your mortgage or do you hope to down-size to a smaller home? Do you want to fix up your current home during retirement? If you haven’t yet paid off the entirety of your mortgage, you may want to consider doing so before you decide to quit work. If you are planning to move and rent a smaller home, it may be wise to do so before you quit your job. If you’re parents, you and your partner may no longer need your large home.
Build up your retirement savings while working
If retirement is some years away and you aren’t quite where you want to be financially, increase your efforts with retirement savings, so that when it’s time to say goodbye to working, you have a substantial amount set aside for a comfortable lifestyle, for years to come. Whether you’ll need to spend money on a care facility in your later years or hope to retire with a wonderful place to live, savings will be needed for the days when you’re no longer in the workforce.
Plan for retirement with your partner
More than likely your partner is working as well. While they may be younger or older, you may want to consider retiring together. Not only is it a good idea if you have travel plans once you retire, but it’s also helpful for preparing for a retirement strategy together, and planning for your post-workforce finances. Whether you want to invest in some home remodeling after retirement or hope to travel around the U.S. in an RV, it’s wise to plan these details together. If you plan on traveling after retiring, it’s always a good idea to look ahead and plan for the costs in advance.
Retirement is something we look forward to, but it may also be overwhelming if you aren’t yet quite ready to do so. Thinking ahead is key to being able to retire successfully and live your later years comfortably. There are options for investing for retirement, as well as ways you can tap into your home equity if needed, whether for remodeling your home or other expenses. Speak to a retirement investment professional to help you prepare.