Whether you plan to retire early, right at 65, or continue working past 65, it’s important to have a retirement plan so that you can continue to live comfortably after finishing your career.
The Consumer Price Index gives a quick breakdown of where you should expect the majority of your expenses to fall in retirement – housing (46 percent), food (15 percent), transportation (14 percent) and health care (12 percent).
If you are in the process of planning for retirement, here are five tips to consider:
- Prepare A Budget-Your retirement can last more than 25 years. Your Social Security benefits alone may not be enough for you to live on. Preparing a budget to determine what your monthly costs in retirement may look like will give you a better idea of how much you’ll need to save. Start by considering how your expenses may change in retirement. For example, you may not spend as much on daily commuting costs but may spend more on vacations. Don’t forget to include health care costs such as estimated Medicare premiums in your budget.
- Develop a Financial Plan-Now that you have an estimated budget in place, you may also want to consult with a financial planner and take a look at the full picture of your financial health. A financial planner can help you evaluate your assets and develop a long-term plan. Make sure to choose a planner who is a Certified Financial Planner, or CFP® Professional. Planning ahead is your key for a happy and healthy retirement.
- Apply for Social Security Benefits-Wondering when to start collecting Social Security benefits? It can be confusing to know when to collect and you can lose money if you cash in on your benefits too soon. There are three common times when people begin taking their Social Security benefit:
- At your age of eligibility, as determined by your birth date
- Upon retirement
- When you’ve reached age 70
Your financial advisor can help you understand each situational benefit and help you make the best choice for your retirement needs.
The Social Security Administration website helps you estimate how big your Social Security check would be if you retired at a each of the different stages.
- Research Medicare Plans-Medicare plans provide specific health insurance coverage to people over the age of 65, and to those who have disabilities. Once you have Original Medicare (Parts A and B), you have additional options. Original Medicare covers about 80 percent of your costs and most people choose to purchase a Medicare Advantage or Medigap plan to help cover the additional 20 percent. You’ll want to research the different plans offered to find the one that’s right for you. As you start shopping for a plan, make sure to consider the deductible amounts and if your doctor is in the plan’s network.
- Enjoy Your Retirement-You worked hard to get here and progressed to a stage in life where you get to relax and enjoy the things you want to do. Whether it is traveling to new places, connecting with loved ones or giving back to the community, spend time the way you want. Stay active and continually strengthen your mind by trying new things, meeting new people, or simply start a new hobby. There are endless ways to enjoy your retirement and to maintain a happy healthy lifestyle.
Get more tips for your retirement on the Retirement Starter. Or, download our Medicare for Dummies eBook below.
