Everyone talks about bucket lists, but there are certain financial basics that you should consider before retirement. To make sure you’re set for retirement, (and the time in between now and then), you will want to speak to a retirement planner. Until you contact a fiduciary focused advisor, consider the following:
Get Rid of Your Debt
Although it's likely you'll still have some debt after you retire, you’ll want to make sure you eliminate as much as possible in the years leading up to retirement. You don't want to leave yourself in a position where you're in a tight financial position. It can take a considerable amount of retirement assets to provide the stream of income necessary to carry debt in retirement. It would be a much better plan to allocate that income toward retirement activities. Having excessive bills to pay can cause a lot of stress and unnecessary burdens that you don’t need in your golden years. You want to enjoy your life in retirement!
If your financial situation is uncertain, you’ll want to speak to a financial advisor about getting your finances in order. You can map a road to saving money and paying off debt, so you increase your chances of a comfortable retirement.
Consider Your Health and Medical Needs
While you want to ensure you're in good health when you get older, it's still best to anticipate what health concerns you may have and what medications you may need in the future. It is often an overlooked component of a sound retirement plan. Be sure to adjust this number by the current inflation rate for medical expenditures. Once beyond that, you'll want to think about health plans and insurance in the event of an emergency.
You can speak to your doctor about potential health issues that you could experience as you get older. This includes the likelihood of certain chronic conditions and risk factors due to your lifestyle or genetic predispositions.
Set Your Lifestyle Budget for Retirement
Because you may not have the monthly income you are used to when you retire, you will want to make sure you have a clear idea of what your budget will be during that time. Think about your daily needs and routine. This will help you map out how much of your monthly and annual spending would be.
Aside from your living situation and food, you should also think about additional living expenses and fun. How often do you plan on visiting those cute grandkids? How many vacations do you want to take?
Think About Passive Income
Sure, retirement is supposed to be all about taking it easy. You've done the work and you finally have some time to do what you want. However, it may make sense for you to set things up so you can still have a passive income in your retirement years.
Speak with an advisor that can help you properly manage your investments in retirement. Just because you’re not working does not mean you should not consider growth-oriented investments in your portfolio. Hopefully, you will need to fund your retirement for many years.
Plan Out the Next Chapter
Now that you've got those practical things out of the way, you can't forget the biggest thing … planning what you are going to do after retirement! One of the biggest hindrances to enjoying this phase in your life is feeling listless and not knowing what to do. Fill your days with meaningful activities. Think about what passions and interests you want to pursue once you have the time.
Retirement can be a very rewarding time of life, but you need to take care of all the basics before it arrives. Start taking action now with some financial planning so you can make the most of your life after employment. Make sure you get the professional help you need for your retirement plan. Michael R. Rose has you covered if you’re looking for a financial advisor for people over 50 in Albuquerque. Reach out to our team today!