10/01/2012

Retirement: Five Things You Need To Do








Planning for retirement is what many people don't take seriously until it is usually too late.  By the time you realize you have not planned adequately, it means it's usually too late.  Most people that fail to plan, plan to fail.  In most cases, people think Social Security and Medicare will be all they need.  That may or may not be true in some cases.  But, if you are planning on retirement funds from SSA to care for you during the retirement stage of your life, you are making a huge mistake.  I can't tell you the number of former workers of mine who now must work a second job in order to make ends meet.  The whole idea of retirement is to avoid working again.  If you work because you want to, that is one thing.  If you work because you have to, that is an entirely different scenario.  Let's examine five things you need to do in order to have a safe and easy retirement.

1Retirement Income.  As discussed above, Social Security is but one mode of funding your retirement years.  For many people they think that is enough.  Hopefully, you have made more than one plan for retirement income before you reach retirement age.  In this day and time, people aren't really worried about retirement because they don't see retirement on the horizon.  But, some or most people have no choice but to retire.  My rule of thumb, in planning retirement income, is to have approximately three-quarters of my monthly work income in retirement.  I planned well enough to where my 401K actually surpasses my income when I was working.

2.  Applying for Social Security.  Most people will retire at 62 so they can get a reduced income from Social Security.  However, if possible, I would wait until 65 for full benefits.  Most people refuse to wait that long because they feel they may not live to that age.  Both those ages are probably going to change in the near future as the solvency of SSA become more and more a question mark. 

3.  Hospital Insurance.  Yes, this is problematic also for people planning for retirement.  Some companies will allow you to continue to keep your insurance with the understanding you will pay a larger, perhaps, much larger portion toward the premium.  You can't apply for Medicare until you are 62.  If you are on Social Security Disability, you can apply for Medicare a year after you have been on disability with SSD.

4.  Expenses.  Consider your mortgage payment, utilities, credit cards, car payments, property taxes, etc., when making plans for retirement.  Ideally you would have your mortgage and car paid off before your retirement.   That's not always possible, of course.  Subtract all your expenses from your estimated retirement income to determine how much you will have to live on each month.  Once you are retired, it will be too late to do this.

5.  Consider retirement goals.  What do you plan to do once you retire?  Do you plan to stay active?  Lay on the couch all day?  You need a plan on what you will do with your life once you retire.  I have always wanted to be a writer.  It was only after I retired did I have the time to do this.  I have now published my first novel.  Think about what you like to do and do it!  You've got the rest of your life to enjoy your passion.  Don't let this time go to waste now. 

These are some things to think about during your retirement stage of planning.  I hope they can be of use to someone.

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