Here's what you need to do now if retirement is on your horizon:
1. Decide how you are going to spend your time. What are you going to do during the first six to 12 months in retirement — and what do you plan to do for the rest of your retired life?
2. Determine (realistically) how much money you will spend each month. Remember to include periodic expenditures such as gifts, vacations, taxes, an occasional new car and emergencies. If you’re unsure how much money you’ll spend, talk with an Edelman Financial Planner.
3. Anticipate the cost of health care. You’ll have no employer to pay this for you; Medicare, Medigap and private insurance are all up to you.
4. Buy a long-term care insurance policy. When you shop for one, consider a hybrid policy by comparing it to a traditional policy.
5. Refinance your mortgage. Many people are shocked to discover that they either cannot borrow money after they retire or are forced to pay higher rates.
6. Boost your cash reserves. Make sure your rainy day fund is enough to cover at least six months’ worth of expenses.
7. Evaluate your sources of income. You have already figured out what you’ll spend on a monthly basis. Now figure out where that money will come from. If you’re unsure if you’ve saved enough to generate enough retirement income, consult with an Edelman planner.
8. Revise your investment strategy. The way you’ve handled your investments over the past 30 years is not how you should handle them for the next 30. While preparing for retirement, you focused on asset accumulation. When you’re in retirement, you need to focus on income and on keeping pace with the increasing cost of living. Assets must be flexible and liquid so you can meet needs you did not anticipate. New words will enter your vocabulary: rollovers and lump sums. An Edelman Financial Planner can help create a plan to manage your investments during retirement.
9. Review your estate plan. Review your will and trust. Don’t have them? Get them. These documents can protect you and your assets while you are alive and benefit your spouse and children when you pass on.
10. If you are not excited about retiring, then don’t. This point is, perhaps, the most important one of all. Many people quickly become bored after retiring. It’s OK — even exciting — to return to school or the workplace. Many do this, often in completely new fields.
Do you have questions about whether you are financially ready to retire, or, simply, need help calculating how much income you will need in retirement? Talk with an Edelman Financial Planner. We’ve provided independent advice to more than 31,000 clients already* — and we’re ready to help you develop a plan to help put you on the path to retirement.
Advisory services offered through Edelman Financial Services, LLC. Securities offered through EF Legacy Securities, LLC, an affiliated broker/dealer, member FINRA/SIPC.
*As of 12/31/2016