Everyone wants to have a good retirement. But you can’t expect to have a comfortable retirement without putting in some legwork ahead of time. There’s a wide variety of things you need to consider in order to get ready for your golden years. Here are six things you need to do to prep for retirement.
Determine What Your Retirement will Look Like
Many people just assume that retirement is all about playing golf and relaxing on the beach. But is that really what you’re dreaming of? Or is that just what you’ve heard you’re supposed to want from it?
Before you do anything, you need to decide what you actually want in retirement. Maybe it involves traveling the United States in an RV. Or possibly, you just want to move to a cabin in the middle of nowhere. Your wants are going to determine how much you need to save, so be honest with yourself. No matter what, it’s a good idea to save more than you think you’ll need ahead of retirement.
Plan for a Healthy Retirement
Living a healthy lifestyle isn't just for retirees, eating a healthy diet, exercising, and keeping mentally active has health benefits for all age groups.
A good place to start is with a yearly wellness checkup where your doctor can perform a physical and order any necessary tests. Your doctor can also provide advice on a diet and exercise regimen specifically tailored to meet your needs.
Most retirees plan to travel during retirement and having a medical issue on the road is not uncommon. One thing you will want to think about is making sure you have all of your prescriptions up to date and easily accessible while traveling. Most drugstores now have apps for your smartphone that let you manage your prescriptions so all you have to do is swipe your cell phone at the mobile pharmacy POS during checkout and you're on your way.
Think About Potential Future Costs
It’s really important for you to think ahead about the costs of your retirement. When you’re in your working years, it’s always possible to do more in order to generate additional income. This isn’t necessarily the case when you’ve reached retirement age.
The average household of people aged 65 and older spent $45,756. That’s a lot of money if you aren’t bringing home a paycheck. The highest expense categories were housing and transportation. Figuring out ways to save on these fronts is hugely beneficial to your financial wellbeing.
Put Money into Retirement Accounts
If you’re trying to save money for retirement, you should put as much as you can into tax-deferred retirement accounts. This will let you save up more, as you won’t need to pay taxes on gains until you take money out of the accounts. There are limits to how much you can contribute to retirement investment accounts on a yearly basis. Contributing as much as possible – as early in life as possible – will prime you for a healthy retirement.
Pay Off Your Debt
Debt can be extremely harmful for your finances at any point in your life. But the dangers of debt are even more pronounced once you reach the point of retirement. When you no longer have a steady income stream, debt can totally take control of your money supply. It’s important that you pay off as much of your debt as possible before you get to retirement.
Consider When to Start Collecting Social Security
Social Security is one of the government programs that helps people feel more secure in retirement. But there can be big differences in the amount of money you receive from Social Security depending on when you decide to begin withdrawing from it.
According to the Huffington Post, people born after 1943 will get an additional eight percent for each year they delay dipping into Social Security—up to age 70. So, while dipping into Social Security earlier will help you retire earlier, waiting can be beneficial to you in the long run.
Lower Your Exposure to Market Volatility
People with money invested in the stock market should reevaluate their positions as they prepare for retirement. It’s a good idea to keep money in stock market equities, as these will help your money grow faster than inflation and can be a main source of income in retirement. However, you might not want to have all your retirement savings in this form of asset.
If something goes wrong with the stock market, you might be forced to sell out of positions in order to cover living expenses, which will put your entire retirement in jeopardy. Consider having some of your retirement money in bonds, CDs, or cash. And make sure you’re well diversified in order to protect against any downturns in a particular sector.
Retirement is an exciting time for people. It’s when all your hard work finally pays off, and you get to enjoy times of rest and relaxation with your loved ones. Just make sure you do some planning, so you actually get to have a good retirement.