If retirement is approaching, you’ve come to the right place.
Being able to retire at a healthy age and spend quality time with your friends and family is an incredible achievement. So many people of retirement age aren’t able to do so due to financial restrictions, but that doesn’t have to be you.
With frugality and responsible savings, you can retire happy and healthy to a life of relaxation. You don’t have to be rich to retire and you don’t have to live poor when you do. In this post, we’re going to show you a 10-step guide for preparing for retirement.
It’s not as hard or as complicated as you might think. Why delay any longer? Let’s get started.
1. Envision Your Retirement
If you want to retire on your terms, you need to envision how you want to live during retirement. Of course, you want to live without restrictions, but you also need to be realistic about what you can and can’t do.
Instead of focusing on the financial aspects, make a list of things that you want to do in retirement. It can include anything; places that you want to travel, things that you want to save for, or maybe it’s just living comfortably for the rest of your life.
Keep it practical. Don’t include any unnecessary expenses and make the goals financially attainable and in-line with how you’ve saved. Making this list will give you goals and things to work towards during your retirement.
2. Look Into Health Insurance
Go see a doctor before you retire to take advantage of your work-sponsored health coverage. Get prescriptions filled, have a check-up, and have any procedures taken care of to ensure that you’re in tip-top shape.
Medicare will start at around age 65, but it’ll only cover roughly half of your medical expenses. Make sure to budget for this when you first begin to consider retirement. You don’t want to run into any unforeseen health problems that drain your retirement fund.
3. Make Easy Lifestyle Changes
To make saving easier and make your retirement fund larger, make small lifestyle changes as you approach retirement age. Maybe it means cutting back on eating out, drinking less alcohol, or even downsizing your living situation. Cutting costs now will mean more money later.
Take into account the fact that your actual living expenses won’t be as high when you do retire. You won’t have to commute to work and back, which will mean less money on gas and auto repairs.
4. Social Security Benefits
The later your social security benefits kick in, the better. If you wait until full retirement age, you can collect 100% of your social security benefits. The earliest you can get your social security benefits is at 62, but things like pension loans are available if you need them.
Everyone has a different optimal age to activate their social security benefits and there are calculators online that help you figure out exactly what that is. You’ll want to consider your own life expectancy vs. how much money you have saved to determine when is best for you.
Consider your assets as well as your cash savings. This might include your home, any valuable collectibles, and antiques. Non-traditional assets can also be turned into income. Maybe you’re an amateur musician or a writer. You can turn your hobbies and passions into potential money-makers during retirement.
6. How Much Do You Want to Work?
Maybe you’ve hit retirement age and you’re not quite ready to stop working. It’s possible to partially retire. Maybe those non-traditional assets that we discussed earlier could come into play. You can work part-time for a while to maintain some income while you transition into retirement.
If you’ve got loftier goals for retirement, like a lot of travel or a vacation home, then you might need to work part-time to afford those things. If you’re up for it, there’s no shame in continuing to work when your career is over.
7. Budget For Lifestyle
If you don’t want to continue to work, you need to budget properly to accommodate the lifestyle that you’ve envisioned for yourself in retirement.
Cutting costs before retirement will allow you to build up a retirement fund, but you need to continue to stick to a budget so that you can do the things you want to do. Staying organized with budgeting software will help you achieve this goal.
8. Prepare For Unexpected Costs
Unforeseen things can happen, so it’s important to have an emergency fund set up in addition to your retirement fund. Anything from minor housing repairs to major health problems could crop up to disrupt plans.
Don’t let the fear of potential problems change how you live, but sit down with your family and crunch some numbers to get a suitable amount of money in your emergency fund.
9. Preparing For Retirement Emotionally
Retirement is a huge lifestyle change. Your body and mind get used to working every day and when you stop, it can be a shock to the system. It’s good to do a bit of reading to prepare yourself for retirement day.
One of the best things you can do to stave off this shock is to stay active. A trip to the gym or even a short walk every day will keep your body feeling normal. Not having to go to work will be great, but it’s important to keep busy too.
10. Stay the Course
Piggybacking on the last point, you have to stay the course when it comes to your retirement plan. It can be easy to fall into a routine, but you should stick to the vision that you set for yourself at the beginning.
If you’ve done everything the right way, you should have enough money to do the things that you want to do. So, do them! Retirement should be a time where you celebrate a productive career and enjoy some well-deserved free time.
Enjoy Your Retirement
Follow these steps and you’ll be able to enjoy your retirement. The most important thing to do when preparing for retirement is to be financially responsible. If you do that, you should be able to do the things you want to do, buy the things you want to buy, and travel to the places you want to see.
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