Happy retirements do not just happen.
Do you fear retirement?
Do you worry about how you will pay the bills?
Do you wonder what will happen when your income stream runs out?
According to a recent Investopedia article titled “6 Signs That You Are OK to Retire,” you are not alone.
What can you do to set yourself up for success?
Full retirement age is either 66 or 67, depending on the year you were born.
Although you can begin collecting Social Security benefits at age 62, you should wait.
The benefit will be higher if you do not collect before your full retirement age.
Have you used your credit card for large purchases?
Do you have a mortgage on your home or payments on an automobile?
If yes, you need to take care of these.
You should not bring debt into retirement.
Your income will be fixed and paying creditors can take a large bite out of your retirement cash flow.
Work out a budget and payment schedule now to eliminate the "drag" of debt.
Do not support others financially.
Supporting others on a retirement income is not wise.
If you are paying for college for your children or they still live at home, you probably are not in a good place to retire.
You should also delay retirement if you are financially responsible for your aging parents.
Make a budget for retirement.
You should know your monthly expected income in retirement before you retire.
With this number in mind, make a monthly budget to cover your monthly expenses as well as a list of lifestyle “wants” you may desire.
If you retire in your mid-60s, your budget should be limited to 4 percent of your investments and Social Security or pension payouts.
This is just a "rule of thumb," but a savvy financial advisor can dial in the number for your unique circumstances.
Review your investments.
Your investment portfolio will play a significant role in your retirement.
How long has it been since you have reviewed these accounts?
You should do this now and make any necessary modifications.
It is wise to move to lower risk investments as you near retirement.
No need to swing for the fence anymore.
Plan as a couple.
If you are married, your retirement will affect your spouse.
Discuss how retirement will affect each of you, as well as what your plans will be in retirement.
Retirement does need to be scary.
In fact, it can bring much enjoyment and meaning.
Take steps now to set yourself up for a pleasant retirement.
Reference: Investopedia (June 1, 2018) “6 Signs That You Are OK to Retire”