The meaning of a happy and fulfilling retirement varies from person to person. For some people, a great retirement means transitioning from a 9-5 job into a meaningful part-time. For others, retirement may mean spending a lot of time with their grandchildren. Today or tomorrow, you have to determine what will give you peace of mind in retirement. If you still haven’t started with a plan, start planning because your chances of secure retirement improve if you start early. To make yourself reliable after your retirement, we have created some key steps for a great retirement plan.
Key Steps for a Great Retirement Plan
1. Start With Early Planning
The first essential step of a solid retirement strategy is an early start of retirement planning. Determine your current age and your expected retirement age. The longer you have for approaching your retirement age, you will be at lower risks. That means you still have time to be focused on your income and preservation of capital. Start planning now so that by the time you retire, you will have a rough idea of your primary goals.
2. Create a Retirement Budget
What would you do with new retirement strategies if you don’t have a plan regarding your retirement budget? The retirement budget is the most critical step for a great retirement plan. First, identify your fixed expenses like housing, taxes, insurance, and some flexible fees like gifts, travel, dining out, clothing, and occasional expenses. Then, match these expenses with your resources. In general, your guaranteed income and maybe a pension will cover the basics. But if you do not plan your retirement budget while you are still in the job, you might regret it later while using your savings to close the gaps.
3. Determine When to Collect Social Security
The initial claim for social security has a direct impact on how much benefits you’ll get per month. Early requests reduces 25% to 30% of your profits at full retirement age. Ideally, it would be best if you waited until the full retirement age to get more benefits for you and your family. However, if you have any reason to believe that your life expectancy is low, you can take social security benefits as early as age 62. In the case of a widow or widower whose spouse has claimed the benefits at full retirement age, he/she will get 100% benefits. While if the spouse claimed Social Security at an early age, then the widow or widower would get only 71-91% benefit.
4. Evaluate Your Health
It is essential to take care of your health before your retirement savings are wasted on doctors’ visits and expensive medicines. Commit to a healthy lifestyle or signup for Medicare (as a preventive measure). You are eligible for signing up for Medicare from the age of 65 and even three months after your 65th birthday month. It will cover all the expenses related to your hospitalization, doctors’ visits, and all outpatient care.
