Retirement planning can be a tricky maze to navigate. You may be wondering if you have considered your finances from every angle, or whether you have really saved enough money to retire. As your retirement date draws closer, follow these eight steps to evaluate your plan.
Estimate your life span. Most retirees today can expect to live 20 or 30 more years after they stop working. Don’t underestimate your own life span, or you could face a money shortage toward the end of your life.
Keep working. You’re looking forward to retirement now, but many retirees actually find retirement a bit boring. Obviously you want to see an end to your main career, but a part time job can keep you active while boosting your budget.
Decide when to claim Social Security. You will receive your full Social Security benefits at “full retirement age”, which ranges from 65 to 67 depending upon your birthday. But if you wait a bit longer, you can increase the size of your monthly checks. On the other hand, if you need to claim benefits earlier (as early as age 62), your check will be permanently reduced. There is no benefit to waiting beyond age 70, but it might be wise to wait as long as you can.
Consolidate your accounts. This isn’t a hard and fast rule, but many retirees find that it’s easier to manage their retirement accounts if they consolidate them into one account.
Sign up for Medicare. Your Medicare enrollment period will begin three months prior to your 65th birthday, and will last for three months afterward. Sign up on time, or you could be penalized with higher premiums.
Contact former employers. About 280 millions dollars’ worth of unclaimed pensions are held by the Pension Benefit Guaranty Corporation. If you may be due a pension from a former employer, contact their human resources department and inquire about it.
Remember to consider health care. The average retiree should expect to spend between $116,000 and $131,000 on health care throughout retirement. Since Medicare does not cover everything you may need, remember to include out-of-pocket health care expenses in your retirement budget.
Plan for long-term care. Medicare also does not cover most of the cost of long-term care. Yet most of us will need some form of nursing care at some point. Set aside enough money to cover this expense, or consider purchasing long term care insurance.
This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
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