Retirement planning combines dreams with reality. The most important things to do before retirement involve planning for both in your future lifestyle.
At some point in their career, everyone dreams about retirement.
We imagine travel, building or buying a second home, and visiting grandchildren.
But these are some of the most important things to do before retirement to make the dream scenario a reality.
It’s important to do a little soul-searching several years before you retire. If you’re just marking the days until you can make your exit, then use the time well to identify why you’re looking forward to leaving your job. And what you’d rather be doing.
If you love your job, you may be reluctant to retire. And that’s okay. More companies are recognizing the value of experience and mentorship.
You may find your role shifting, or even expanding, but keeping you working at a job and in an organization you love. If you do leave your job, it doesn’t mean you can’t get another one. Many retirees begin “third act” careers in fields they care about after retiring.
An important key to a happy and successful retirement is preparing yourself financially so you won’t have to worry about outliving your money. This means figuring out how much you’ll need each month to live comfortably. Plus you’ll need to figure out how to generate that income when you are no longer working. It means paying down debt, reducing expenses, and saving as much as you can.
Also, think about how you will pay for medical insurance. Medicare pays a lot, but not all, of your medical bills. You’ll probably need a Medicare supplemental or Medigap plan.
Start saving more money—as much as you can—in an emergency fund. Plus consider purchasing long-term care insurance if you can find it.
Assess your retirement plan. Work with a qualified financial advisor to determine if you need to rebalance the mix of investments in your 401(k), 403(b), or IRAs between stocks, bonds, real estate, and possibly an https://thedirecteffect.com/how-to-decide-if-a-retirement-annuity-is-right-for-you/annuity. You should also talk to a financial advisor or accountant about when you can or should begin to take social security payments. And you should ask about the tax implications of your financial decisions.
Sit down and have a discussion with your partner to sync up your ideas of retirement life. If you always assumed you’d downsize and move closer to the grandchildren, confirm your assumption with your spouse. They may have an entirely different notion of the perfect retirement location. Talk about the more everyday things, too—like who will do the yardwork and how much either of you likes to cook.
Finally, be ready for final arrangements. Estate planning puts your house in order. Plus it gives you peace of mind that you have done what you can for your children (if you have them). And that you’ve decided how best to distribute your assets after you’re gone.
Finishing your financial and your estate plan before you retire frees you up to make a new plan for your time—your hobbies, your travel, and your family.