If you’re going to retire by next year, here are some effective money-savings decisions that you should make the year before the retirement.
1 Start countdown – As life goes on and so its transitions, your retirement will rank way up there amongst other challenging transitions. It is the most significant change of a person’s working life and so you must plan carefully about how to navigate your way to ensure a successful retirement. You must make thoughtful decisions that carry both financial and personal implications.
Should you sell your home and look for a smaller one? Would you afford to pursue your hobbies or vacation plans? How would you spend your time? – You must set your goals regarding these.
After years of work, most people boast mixed emotions and thoughts about their retirement. They may like the feeling to not working, but at the same time, they get nervous about losing their work identity or financial ability. Overall, it’s a period of tremendous stress. If you don’t want your retirement to be a stressful one, you must start planning for it well in advance; at least 5 years before it actually takes place.
2 Decide on when to get Social Security – Now it’s time to decide on when you should get your Social Security. The process is tricky, especially if you’re applying for both you and your spouse. It would be better if you delay the benefits until you reach actual retirement age – about 65, based on your birth year. However, being forced to retire you may plan it as early as even 62.
You should have clear idea about Social Security benefits at major ages like your full-retirement age and at the age of 70 and then decide whether or not you should wait to get maximum benefits.
Being a married individual and attained full retirement age, you will have ‘file and suspend’ option. This option allows you to initially apply the benefits and then ask that the payments be suspended in order that your spouse may get a spouse’s benefits, while you earn extra benefits up to the age of 70. However, you should apply for the benefits 3 months in advance of when you actually want to start getting them.
3 Make a post-retirement financial plan – There is a notion amongst common people that the post-retirements expenditure will be lower than the pre-retirement one. However, this is not the fact. It all depends on you. For example, when you don’t have to dress up for office, then you may like to travel more. Or, when you don’t need to go for lunch with your colleagues, you may like to go for dinner more often with your spouse. So this is the fact that takes place in reality. So you must need to control these expenses and prepare a financial plan that matches with your spending with post-retirement income. The plan must include expenses such as grocery bills, utility bills, regular medical expenses, insurance premiums, and mortgage. Maintain a record of what you spend per month prior to your retirement as it would give you an idea of what expenses are not likely to be changed after retirement.
These are just some of many strategies that you should make well before your retirement. There are many sites like The Sharpener where you will get more money moves to ensure better post-retirement life.
Author’s Bio – Lopez Genelia is a finance industry blogger. She regularly writes for finance communities like The Sharpener.