10 November 2015
Ten Things to Do Before You Retire

Retirement is a wonderful option for some of us, but before you stop punching the time clock, take some steps to make sure retirement is what you really want.

Determine if you really, really want to retire. Yep, it sure sounds good. No more work stress, squelch the office gossip or tyrannical manager – sounds great, right?

Well, for some it is great. They have a retirement plan. Travel, volunteering, more time with friends and family, golf or other lifetime sports – for some people, retirement is a time to do exactly what they want. But, what if you don’t want to buy an RV or take up golf?

For many of us, work is satisfying. Sure, some days you’d like to sleep in, but if you didn’t have a job to go to, would you get bored in about 20 minutes? If you enjoy going to work, interacting, solving problems, why retire at all?

Define what retirement means to you. What will you do with all that free time? If you don’t have a plan, you may end up watching TV at 2:00 in the afternoon out of boredom.

Figure out if you can afford to retire. You might want to visit with a financial planner to figure this one out. How much have you invested? What’s Social Security going to pay out each month? Do you plan to work part-time to bring in extra income?

What can you do in retirement to add a little income and make your retirement a little more exciting? You’ll want to have plans in place before giving final notice.

Figure out how much Uncle Sam is going to give you in Social Security. Here’s a simple calculator to determine how much money you’ll have each month with Social Security, investment income, a pension, and maybe a stress-free part-time job to keep yourself engaged with other people.

Don’t lock in to anything. Stay flexible. Until you know what really works for you and your family, consider semi-retirement. Look at other retirement options, i.e. moving to a low-tax state, or getting by on less because you need less. Keep your options wide open until you have a retirement plan in place.

Determine where you want to live. Many cities have age-restricted senior living communities that cater to retirees. You can buy a home, or cash in the equity in your current home and rent. Let the landlord worry about upkeep and mowing the lawn.

Warm climate? Close to ski resorts? Back to nature? Build it, buy it, or rent it? You need a roof over your head to keep your stuff dry. Where will that place be? Do you want to downsize to reduce costs and upkeep, or do you want a place with vroom for extended family to visit?

How are you feeling? Health is a critical decision when considering retirement. Are you in good health? Kicked the bad habits like smoking? Added exercise to the daily routine? Or, is your health an issue? Medical expenses add up quickly, and if you’re going to have to spend your retirement nest egg on medical bills, retirement might not be what you had in mind.

Get a top-down physical before moving forward with retirement plans. When you get a clean bill of health, you’ll have more retirement options.

Test your retirement. Start by creating a retirement budget based on the income you expect to have when your paychecks stop. Then, live on that budget for 12 months. If you can get through a year without dipping into your savings, you might just be ready to sit back and watch the world go by.

Start cutting costs. Clip coupons and save 10% to 15% on groceries. Find that little gem of a consignment store and buy great clothes at great prices. Vacation closer to home to cut travel costs. Determine if these cost-cutting measures suit your lifestyle and expectations.

Build a safety net. You walk out of the gym after a strenuous work-out and get hit by a bus. Who knows what’s going to happen – especially in retirement? Who can predict what tomorrow will bring? So, tuck away some of your retirement investment in safe, secure money market accounts, certificates  of deposits (CDs), and other “almost like cash” investments.

Network. Sign up for a Facebook® account and an account on Twitter®. Hook up with like-minded people online – people who can stimulate your mind and maybe even add a little to your wallet with some freelance work.

That’s it. Simple. Unfortunately, many of us don’t plan for retirement. We just decide the time is right, give notice, and be bored to tears in a week. Just like any major change in life, retirement should be planned – in advance.

So, before you tell the boss you’re retiring, figure out just what retirement means, where you’re going to live, how much money you’ll get each month – plan for retirement the same way you planned to build your investment portfolio.

Know what you’re going to do in your retirement years before retiring to enjoy the best years of your life.

 

The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice.

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