Retirement brings with itself a lot of changes in a person’s life. After decades of working, it becomes a challenge to deal with the sudden lack of involvement with the hustle and bustle of everyday life. Many want to keep working and saving so they never run out of money, while others try to make that smooth transition into the life of a retiree.
This process gets especially tough if you aren’t prepared or aware of certain things regarding retirement, before the time actually comes. Here are a few things you should do before you retire from your professional career:
While you are still on a regular income, one thing you could do is get one-time expenditures budgeted out and set aside. This could be the dream vacation you planned with your wife in Hawaii, buying a new house for the family, or getting the car you’ve always wanted to, make sure you’ve planned out the required expenses before you retire. If your expenses costs more than you expected, you can always work another few months to pay for it. But be as prepared as you can be for these large chunks of money that you might need to spend.
If you are still looking to work a while longer after your retirement, you should start planning out your career options after retirement. You could speak to your employer about giving you a part-time position or ask the management to consider allowing you to freelance or work from home. You can even start a small business of your own to pass the time after you retire. Since you will already have garnered years of experience, you can run a business in the field you worked it, or even work on something you’ve always wanted to but never got the chance because of your hectic work life. Planning out an alternative early on could help you retire sooner or even save up for an even better lifestyle.
Learning to be frugal takes you a long way in life. Even if you haven’t been so for your whole life, a few years right before retirement hits is a good time to start. You will be surprised with how much you can save up in that short period of time by just changing a few things in your regular spending patterns. Daily Starbucks, buying new clothes every few months can be some habit to work on. It’s important to put money away this way for the future because even with a worked out career plan after your retirement, you never know when you will need to reach out into your savings account for a rainy day.
Reviewing your health insurance is crucial at this point in life. Health care costs continue to rise while the benefits suffer. Keep track of all your health insurance coverages that lead up to your retirement so you can find ways to save money while maintaining a good health insurance. Don’t forget to add in vision and dental insurance as well because a toothache could easily cost you a hundreds of dollars. These insurances will not only lower your expenses but also act as preventive care. It’s the time of life where you really need to start taking care of your own health.
Clearing out Debt and Taxes
Do not let taxes get in the way of your perfect retirement plan. They can turn into major obstacles when it comes to managing your finances in the later years. Start piling up all the taxes you have yet to file and pay off and keep track of them until you reach retirement. Make sure you pay off all your debts before retirement too. If that becomes impossible, at least etch out a budget that can go out to paying off your debts. Getting rid of any past debts be it student debt, vehicle debt, mortgages etc. is just as important as not adding any further debts. It is not a good idea to have debts even after retirement.
Overseeing Estate Planning
It is necessary for everyone to update their will, power of attorney, trust fund etc. One of the most common mistakes people make here is that they have accounts that circumvent the will, like IRAs, pension plans, annuities etc. This can end up leaving no funds available to carry out the decedent’s wishes. It is recommended that people review their wills and accounts at least every five years to make sure they are up to date with the costs. Before retirement is as good a time as any to make sure all your assets and belonging are in check and you are prepared if the unexpected happens. More so, you don’t want your little Roman Kingdom you call home to fall after you die, just because your property was not equally divided. Therefore, it is always safe to plan your estates out and even for Probate if possible – better be safe than sorry!
Retirement is a big change after decades of being an active, working member of the society. But with this change comes many new opportunities of fulfilling many dreams and enjoying life peacefully like you never did before. For that to happen, it is important to make sure you’ve smoothened things out for yourself financially and mentally and physically. After that, enjoy the retirement to the fullest!