A lot of people dive into retirement only to learn there are a lot of things they never thought of. Don't let unanswered questions ruin your retirement dream. These five questions will allow you to make sure you are ready to get your retirement rolling.
Some people are ready to retire at age 62, while others decide to keep working until well in their 70s (and congressmen never seem to retire). When you retire is going to make a big difference on how much of a nestegg you need. So if you aren't ready to stop working, maybe you decide to put off retirement for another couple of years. Another option is to ease into retirement by going part-time, either at your existing employer or with a new career that is more of a personal hobby. No matter which option you choose, make sure it is the right one for you, so you can enjoy retirement without being discontent with your working situation.
What is my income plan?
Speaking of income in retirement, how much money do you plan on making or drawing in your retirement? For years, the rule has been that 4% annually from your portfolio will be enough to live on as well as enough to maintain a reasonable lifestyle, but that rule doesn't work for everyone. If the 4% rule doesn't work for you, consider taking out a SMALL amount more, or trying to cut expenses, so the rule will work. According to Holly Johonson from ClubThrifty.com, "If you get used to cutting unneccessary expenses early on, you can focus your retirement spending on living a fulfilling retirement instead of just paying bills."
Remember to count all your income. Income would include retirement savings, social security, investment income, part-time work or any pensions you may have.
People are living longer, so make sure you are planning for a long retirement. According to the Social Security Administration, the average "man reaching age 65 today can expect to live until age 84.3" and the average "woman turning age 65 today can expect to live until age 86.6."
More than likely you've always had your health insurance through your work, but what are you going to do when you're no longer working?
Medicare is an excellent option for anyone looking for affordable healthcare, but it doesn't cover everything. Jason Patterson from MedicareWallet.org tells us, "The average person going on Medicare at age 65 will pay $100 a month to have a Medicare supplement to complete their coverage, but this will vary greatly from state to state." Take the time to look at the Medicare options and alternative supplemental plans, like Medigap or Medicare Advantage, to make sure you have the coverage you need.
Do I have a will?
Speaking of your health, you aren't going to live forever, do you know what's going to happen to your estate once you pass away? Sure, making a will isn't the most fun thing you can do, but it's one of the most important financial steps you can take to make sure your family is not left with a mess. Most people seem to understand the importance of a will, but a Rocket Lawyer survey shows that over 50% of Americans will die without a one. Do not put your family in a situation where they have to deal with the government to decide what happens to your estate.
Speaking of death, have you thought about life insurance recently? Life insurance is one of the most important purchases for you and your loved ones. According to Dave Michaelec of TrueLifeQuote.com,"The purpose of life insurance to make sure that your family is taken care of if anything were to happen to you." This can include replacing income or just making sure that no one is financially burdened with your final expenses.
There are plenty of options for life insurance, even for someone getting close to retirement. Obviously, a 30-year term policy probably isn't the best bet, but a 15-year term is an affordable way to go. If you're close to retirement, your kids are grown, and there isn't anybody relying on your income, maybe it's time to switch to burial insurance and save yourself thousands of dollars.
Retirement is an exciting time of life. You've worked hard, and now it's your time to enjoy it, but don't go into it blindly. Without some planning, your retirement dream can fade into a retirement nightmare. Asking yourself a few simple questions can drastically change how prepared you are for retirement and give you the advantage you need to enjoy those years on the beach or out on the golf course without having to worry if you've done enough.