Retirement is a big life transition that takes more than just deciding to do so! You’ll need careful planning and consideration to rest easy in your old age. As you approach this new chapter in your life, there are a few key things you need to keep in mind and plan before you hit retirement. Whether you’re well on your way to retirement or you’re curious, you’ve come to the right place!
Here are six things to remember before you retire to ensure you start your retirement right!
1. Start with a plan
One of the most crucial aspects of retirement is planning ahead. The earlier you start, the better, and the best place to start is to calculate how much money you’ll need to be comfortable. Whether you need to retire in NZ or AU, set some clear retirement goals and calculate your potential retirement gap. Think about your expected expenses like housing, healthcare, and leisure activities. Consider your sources of income, savings, investments, pensions, and social security. With the right financial plan, you can provide yourself with a roadmap to a worry-free retirement.
2. Think about your social
The next thing you need to think about is your Social Security, which is, for most retirees’ a vital income source. Understanding how Social Security benefits work and how they fit into your financial plan is key. You can start receiving these benefits as early as age 62, but your monthly benefits will be higher if you wait until full retirement age. This age can also vary based on your birth year, so keep that in mind! Figuring out the best time to claim your benefits can help you max out your Social Security income throughout your retirement.
3. Think about your healthcare
Healthcare costs tend to increase as you get older, making it crucial to plan for medical expenses during retirement. Medicare is a great health insurance program for people aged 65 and older and can cover some of your healthcare costs. But since it doesn’t cover everything, consider your other options. Medigap or Medicare Advantage plans are great options to fill the gaps in your coverage. Long-term care insurance is also worth considering, as it can help cover the costs of assisted living or nursing home care. You never know what you may need during retirement, so it’s always good to come prepared!
4. Plan for inflation
Another important thing to think about when planning for retirement is inflation. Inflation can erode your purchasing power over time and affect your retirement savings. When planning for retirement, it’s essential to factor in the impact of inflation. Think about your investments that have the potential to outpace inflation, such as stocks and real estate. Check-in on your financial plan and make adjustments to ensure your savings can withstand the effects. Learn a bit about investing and diversify your investments to help lessen the risks associated with inflation.
5. Plan your estate
Estate planning is another essential aspect of retirement that is often overlooked. It involves creating a plan to distribute your assets after your passing and should be a key step in your plan. This can include many things, from creating a will to establishing trusts and naming beneficiaries. It also includes things like assigning a power of attorney and a healthcare proxy.
Proper estate planning ensures that your assets are distributed according to you and can also minimize estate taxes. Take time to take inventory and plan your estate to provide financial security for your loved ones.
6. Stay active and engaged
Last but not least, retirement is not just about financial planning and making sure you’re covered. A large part of retirement is also about maintaining a fulfilling and active lifestyle. Many retirees find purpose and enjoyment in pursuing hobbies, volunteering, or traveling. Others find fulfillment through spending quality time with family and friends. You must stay socially engaged and physically active to stay happy and healthy during retirement.
Think about exploring new interests and activities you didn’t have time for during your working years. Look for ways to make the most of your retirement that don’t all revolve around money!
Conclusion
Retiring takes a little work, but it’s well worth it for smooth sailing! To plan your retirement right, you have to do your research and start with a solid plan. Think about your social security and benefits and future healthcare needs. Take the necessary time to plan your estate, and don’t forget to factor in inflation. Last but not least, don’t forget to think about your enrichment and how you will spend your time in retirement! Keep these 6 points in mind, and you’re sure to enter retirement relaxed and like a pro!
