Table of Contents
- Think about what you want your retirement to look like
- Downsize your home or refinance your mortgage
- Fluff up your savings
- Reevaluate your budget
- Take advantage of senior citizen discounts
- Take a senior driving course
- Pay off your debt
- Maximize your 401k contribution
- Educate yourself about Social Security benefits
- Meet with a financial advisor
- Update your will
- Examine your insurance policies
- Senior proof your home
- Freeze your property taxes
- Know when you can start withdrawing from your retirement account
It might seem like a long way off, but before you know it, you’ll be ready to retire. Even if you plan to work past 55, here’s a list of things you’ll want to think about doing so your Golden Years are a little less stressful
Think about what you want your retirement to look like
Do you want to stay in your home or live in a retirement community? Will you need long-term care? Where do you want to live after you retire? Do you have enough money invested to live comfortably for 15-25 years after you retire? Before you can adequately plan for your retirement, you need to have an idea of what you want your golden years to look like.
Downsize your home or refinance your mortgage
Nobody really wants to sell a house they’ve spent years making payments on, but by this time you’ve accumulated a hefty chunk of equity. Consider downsizing and putting the extra cash into your investment portfolio. At the very least, think about refinancing your mortgage if your house isn’t already paid off. You’ll be grateful for the smaller payment when it comes time to stop working.
Fluff up your savings
Speaking of savings, experts suggest you have at least $1 million dollars in savings or your retirement fund in order to live comfortably. If you don’t already have 5 to 6 times your desired yearly income already saved, take a look at what you can do to add more.
Reevaluate your budget
Part of improving your retirement funds means you might have to reevaluate your budget. See if you can find ways to cut costs, such as eating out less or cancel some of those magazine subscriptions. When you’ve identified some areas you might be able to trim, put that extra money into an IRA or savings account.
Take advantage of senior citizen discounts
Perhaps one of the best things about turning 55 is that you now qualify for senior citizen discounts. Everything from restaurants and grocery stores to prescription drugs and cell phone plans offer discounts for senior citizens.
Take a senior driving course
Speaking of discounts, don’t forget car insurance. Take yourself to your local Department of Motor Vehicles and sign up for a senior driving course. Doing so can open the door to cheaper rates once you pass that magic age.
Pay off your debt
If you haven’t already, you’ll want to make sure you pay off all of your outstanding debt. Credit cards, loans, mortgage, and medical bills all add unnecessary stress after you retire. Paying them off will put that hard earned money back in your pocket where it belongs.
Maximize your 401k contribution
Chances are you and your employer were contributing to a 401K plan all these years. Take a look at what percentage you’re currently contributing and if you can afford it, bump it up. The short term loss is a long term gain.
Educate yourself about Social Security benefits
Ahh, social security. It’s that fund you’ve contributed to all your life without a choice. When you approach retirement age, take a look at your balance and figure out when it’s the best time to start cashing it out. It’s important to know the numbers because if you sign up too soon, it could cost you something to the tune of $200,000. Wait as long as you can before filing.
Meet with a financial advisor
Whether or not you have an investment portfolio, you’ll want to make an appointment to meet with a financial advisor at some point. This person can examine all of your sources of income and let you know if you have enough set aside to meet your financial goals after retirement. If you don’t, they’ll help you develop a plan to keep building your wealth.
Update your will
It’s not a topic you’re going to want to think about as you close in on retirement, but planning for your death is crucial. You’ll want to make sure your beneficiaries, power of attorney, and advanced directives are all up-to-date so that if you fall ill or when you pass, your family isn’t left with making tough decisions on your behalf. Do them a favor and make your wishes known in advance.
Examine your insurance policies
There seems to be an insurance policy for just about everything and you’ll want to take the time to make sure the ones you have are adequate. Be knowledgeable about the terms of your life, long-term care, and disability policies and make changes where necessary. Now is also a good time to look into Medicare terms.
Senior proof your home
Is your home easy to navigate, or do you have lots of stairs? Is your laundry the main level? Do you get a lot of snow and need to think about hiring someone to shovel? What about your yard, can you mow it or might you need help. Nobody wants to feel helpless as they get up there in age, but these are things you need to take into consideration. Make adjustments now or at least have a plan to address these things before they become problematic. You’ll thank yourself later.
Freeze your property taxes
Lots of people don’t know this, but after you reach a certain age and meet certain conditions, you might be eligible to freeze your property taxes.
Know when you can start withdrawing from your retirement account
This is a big one. If you want to maximize your benefits and minimize the amount you’ll pay in penalties, you must know when you can start making withdrawals on your retirement fund. There’s a delicate balance, too, because while you want to make this money last as long as possible, you’re also subject to a hefty tax payout upon your death. So, make sure you know the terms of your pension and any other retirement accounts you hold.
Retirement is a big deal. You spend the majority of your life working towards it and if you want to enjoy it to the fullest extent possible, you need to make sure you’re in a position to do so. The sooner you take care of the big things, the less time you’ll spend trying to figure it out later. You do want to enjoy your retirement, after all.