If you’re planning to retire in the next few years, it’s important to plan ahead. You can’t just wing it. By starting to make plans early, you’ll make sure you don’t miss any important steps. Here are ten things you should do before you retire.
For most people, the thought of saving for retirement doesn’t excite them at all. It’s boring, it doesn’t make them think of anything they want in particular, and it makes them yawn.
But the fact is that saving for retirement is very important because what you do now will affect how happy and comfortable you will be when you retire from your career.
- Know your possible retirement needs
It is never too late to start planning for your retirement. But the sooner you get started, the better. Here are ten things to think about as you plan for retirement:
- How much income will you get from Social Security?
- What will your living arrangements be during retirement?
- How much will you spend on travel and entertainment?
- What will you do with all of that time?
- Will you need long-term care?
- How will you manage your investments?
- Are you saving enough for retirement?
- Will you have enough money to leave behind for your children or other heirs?
- Will you have enough money to pay for medical expenses?
- Will your spouse still be living.
- Do contribute to your employer’s retirement savings plan
No matter how good a job you do, the chances are you will need to make a living for yourself well after you retire from it. So, you might as well be prepared, right?
Contribute regularly to your employer-sponsored retirement savings plan, even if the company doesn’t make the process easy.
A 401k or similar plan offers a tax-advantaged way to save for retirement. If you’re self-employed, open an IRA at a reputable online broker.
Making regular contributions will allow you to take advantage of the benefits of compound interest, which will grow your money much faster than you could save it on your own.
- Consider investments
In an ideal world, you would be able to fund your retirement with just a few stocks that would deliver a lifetime of income. You need a diversified portfolio filled out with bonds, real estate, and perhaps a few other asset classes in the real world. Why? Because all types of investments are not created equal.
While stocks have historically outperformed all other investment types over the long term, they also can fluctuate wildly in the short term. Meanwhile, bonds are known for their steady payouts and low but steady returns. That’s why they’re called “fixed income” rather than “risky” income.
- Know about employer’s pension plan
The U.S. does not have a universal pension system, as is the case in many other countries. The United Kingdom, for example, has the National Health Service. The United States doesn’t have a single universal system.
Instead, Americans have to rely on employer-sponsored pension plans (401Ks) or government programs like Social Security to ensure that they have enough income to live on after they stop working.
- Ask for a retirement plan to your employer
Retirement planning is not a one-time event, but it takes work. So, take the time to learn how to plan for your retirement by taking advantage of the many tools and resources available.
Whether you plan to retire early or at age 65, there are many steps you can take to ensure you’re on the right track. You can start with your employer’s retirement plan by asking your employer to start a plan for your workplace.
- Put your earnings in an individual retirement account
There are many reasons to put money into an Individual Retirement Account, or IRA for short. To begin with, IRAs are a good way to save for retirement since they have tax advantages. Then there’s the fact that the money you put in an IRA is yours, and you can decide how to invest it as you see fit. You may prefer to invest in stocks, bonds, or a combination of the two, or you may want to invest in a mix of both stocks and bonds. A well-rounded investment strategy is critical to building a secure retirement fund, and no one can tell you how to invest your money best.
- Look for Social security benefits
You have worked hard for years, and now you are ready to enjoy the fruits of your labor. You are about to retire, and you are looking forward to doing all the things you have always wanted to do. You have helped your kids get through college, and now you can help support them as they start their own families. You can take that long-awaited vacation to Europe and visit all the historical landmarks you have always dreamed of seeing. You can even travel to other countries and witness nature in its purest form.
- Ask more questions
When our time on this Earth is over, we’ll leave behind a legacy, whether it’s something big like a business or something small, like a small collection of essays that we wrote. When planning for retirement, it’s important to make sure you’re leaving a positive legacy, one that can live on far after you’ve left this Earth.