Retirement Checklist: Preparing for your Senior Years
Retirement is not just the time after you leave the workforce, rather it is the culmination of all the years that you have worked hard. Though retirement seems so simple, keep in mind that it takes the proper preparation for it to be fruitful. Here’s a simple retirement checklist that can guide you as you plan ahead for your senior years.
In order for you to effectively plan your retirement, make sure that you have accomplished or determined the following:
Balance between your retirement expenses and income
Determine the resources that would finance your retirement years and factor them to your future expenses. Have a clear picture of how much you’ll likely spend in retirement and consider if the monetary income from your retirement plan, investments, social security or annuity can support your desired lifestyle. Likewise, it’s also crucial to determine the right timing for tapping into these resources.
If your income falls short of your expenses, then you might need to think of ways on how to increase your retirement nest. One way is to downsize your spending today in order to increase your savings for the future. On the other hand, you might want to consider working longer, however, make sure to calculate your risks before you do so. Take into consideration your health and any probability that you’ll lose your job based on the current economic scenario.
Debt-free financial standing
In order for you to fully enjoy your retirement, make sure that you don’t have any type of debt in tow as you face your senior years. Substantial debt such as mortgage can eat up a considerable portion off your retirement nest if you carry on paying for it after you have left your career. If you want to maximize your retirement money on things that you want to do in your senior years, make sure that you have eliminated any outstanding payable before you leave the workforce.
Well-assessed insurance needs
Retirement marks a huge change in your life as well as in your insurance requirements. Before you enter into this phase, it’s essential for you to reevaluate your needs for certain policies.
One of the insurance policies that are essential to have is life insurance. As you face your senior years, determine if you still need to be covered under this policy. Are your loved ones still depending on you or are they living independently? If it’s the latter, you can streamline your term and coverage. Likewise, factor in your estate. If you have a considerable amount of property, you might want to retain your life insurance. What your dependents will get out of your death benefit will be used to pay for estate taxes once you’ve gone.
Health care is a need, regardless of age. However, the elderly typically have a higher health care requirement due to their frailer health. Having a health insurance policy in place is still the best way to avert the impact of health-related expenses against your retirement nest egg. That’s why it is strongly advised to retain its coverage even in your senior years.
Likewise, long-term care insurance is something you shouldn’t forego as you enter retirement. Current estimates show that 7 out of 10 individuals aging 65 and beyond will need long-term care. Given this figure, the majority will need to be administered a care of some sort at least once in their senior years.
You may say that you can retirement nest is sufficient enough to finance your care expenses, however, consider that care rates are continually on the rise. As per Genworth’s Cost of Care Survey for 2013, it is found that nursing home stay cost have ballooned by 24% in just a span of 5 years. As for assisted living, it’s a 23% increase rate for the same timeframe. In-home care has a less dramatic price hike, but its rate is still showing a gradual incline. Factor these figures in and consider if your retirement income is strong enough to withstand the changes in care costs. If not, incorporate a long-term care insurance policy in your retirement financial plan.
Retirement is seen as a time of leisure, however, if unplanned, your senior years could be spent just watching TV. Sure, retirement is a time to relax, but that doesn’t give you the ticket to be lazy. As you face your senior years, make sure that your activities will broaden your knowledge and social spectrum. That’s why it pays to plan for these activities even if it will take place years ahead.
Think about what you’ve wanted to do for so long. Is it travelling? Is it learning a new skill such as gardening? Is it writing a book? Do you want to do volunteer work? Consider all of these and plan them accordingly to your retirement’s financial capability. Meanwhile, if you want to earn extra, you can consider taking up a part-time job.
Advice from seniors
If you want substantial insight regarding the world of retirement, seek the advice of an elderly person. By talking to them, you will be able to get practical tips based from their own experience. Nothing beats an advice that’s based on actual events. If you want to strengthen your financial plan, talking to a retired person can further strengthen your course of action.
Retirement is a time of culmination, not of isolation. Enhance the quality of your life as you face your senior years by planning for it accordingly through the checklist mentioned above.