Checklist for The Year Before You Retire
Even though you’re still working every day, carrying your full load of responsibilities, it’s crucial to cross your Ts and dot your Is for your new life ahead in retirement. These six tips are crucial to cross off your to-do list before you enter retirement.
- Address Your Budget for Retirement
Put together a monthly budget with all expenses you expect to pay in retirement. This can be your north star in providing the goals and standards for your savings, retirement investment, and overall lifestyle in retirement.
- Adjust Toward Income
Your investments are probably skewed towards growth and asset appreciation, given that all this time you’ve been looking to give yourself the most valuable nest egg possible. But now, it’s time to focus your investments on income so that your assets can work towards covering your costs.
- Plan for Medicare
Starting at age 65, you’re eligible for Medicare. But contrary to popular belief, Medicare doesn’t cover doctor visits, preventative care, and other treatments for free! Medicare comes with different parts that cover different needs and come with different costs, so make sure you know exactly what you need and should receive from your Medicare before you retire.
- Address Debt
Debt can be a major cost for retirees given that they are making the switch to paying themselves rather than receiving external income. If you have outstanding mortgage payments or credit debt, having a strategy to pay off debt in a way that protects your nest egg while meaningfully reducing your debt can help you maximize your retirement income.
- Have a Social Security Claiming Strategy
Social Security is designed to cover roughly 40% of your income in retirement. That’s a big chunk of your income! But claiming at different times comes with benefits and drawbacks. Claiming early means you may receive fewer benefits, but guaranteed income comes sooner. Claiming late means you’ll have to use supplemental income in the meantime, but you’ll receive a greater regular benefit amount once you claim. Your optimal Social Security strategy is based on your own unique financial situation.
- Decide What You’ll Do!
Retirement is only a retirement from your job, not from your life. Your post-working years should be filled with enriching experiences, relaxation, and journeys to share with your friends and loved ones. Make sure you have a clear plan for how to fill your days so that the retirement boredom doesn’t get you down!
Securities offered through DAI Securities, LLC, member FINRA/SIPC. Advisory services offered through DAI Wealth, Inc.., an SEC Registered Investment Adviser. DAI Securities, LLC and DAI Wealth, Inc. are separate, but affiliated, entities. This document is for educational purposes only and should not be construed as legal or tax advice. One should consult a legal or tax professional regarding their own personal situation. Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products offered by an insurance company. They do not refer in any way to securities or investment advisory products. Insurance policy applications are vetted through an underwriting process set forth by the issuing insurance company. Some applications may not be accepted based upon adverse underwriting results. Death benefit payouts are based upon the claims paying ability of the issuing insurance company. The firm providing this document is not affiliated with the Social Security Administration or any other government entity.
Sources:
https://www.investopedia.com/retirement/last-year-you-retire/
https://www.ssa.gov/myaccount/assets/materials/workers-61-69.pdf
