Do These 5 Things Before Retiring!
Is your dream of retirement getting closer to reality? Here are a few steps to take before taking the leap!
- Income Source: This step should be taken long enough before planned to give you time to make adjustments. Assess your sources of retirement income to make sure that you will be able to live the retirement of your dreams. Consult your investment advisor to see what kind of income you can expect each year from your 401k, IRA or pension.
- Social Security: Social Security makes up a chunk of many retirees’ income. If you don’t already have a My Social Security account, create one at https://www.ssa.gov/, and review your estimated benefits for your planned retirement age. Consider whether delaying the start of Social Security benefits is in your best interest. Do you have enough alternate sources of income if you want to delay Social Security?
- Health Insurance: Health insurance costs can be a large expense that most will have to pay for when leaving the workforce. Depending on your age and family status, consider coverage through a still-working spouse, COBRA, state Health Insurance Marketplace, or Medicare if you will not have employer provided coverage as part of your retirement package. You will have to file for Medicare three months before turning age 65 to avoid penalties.
- Passing the Time: What does your retirement look like? Will you continue to work part-time, volunteer, watch the grandkids, travel? Your choices will impact the amount of additional income you will need to sustain that lifestyle.
- Budget: This is obvious but often overlooked. Once you have done your homework and decided how you want to spend retirement, you will have to create a budget to make sure your dreams can become reality.
Honorine Campisi, CPA