The retirement “zone”
Are you considering retiring in the next five years or so? If so you’re in the retirement “zone.” This is a critical period during which you’ll be faced with a number of important choices, and the decisions you make can have long-lasting consequences. The key is to understand the underlying issues and to recognize the long-term effects of the decisions you make today.
Tip: If you’ve recently retired, you’re also in the retirement zone. You’ll want to evaluate your financial situation in light of the decisions that you’ve already made, and consider adjusting your overall plan to reflect your current expectations and circumstances.
Are you ready to retire?
The first question that you should ask yourself is: “Am I ready to retire?” For many, the question isn’t as easy to answer as it might seem. That’s because it needs to be considered on two levels. The first, and probably the most obvious, is the financial side. Can you afford to retire? More specifically, can you afford the retirement you want? The question relates to the emotional issues surrounding retirement–how prepared are you for this new stage of your life? Have a consideration on both the financial and emotional aspects of retirement carefully.
Tip: There’s not always a “right” time to retire. There can be, though, a wrong time to retire. If you’re not emotionally ready to retire, it may not make sense to do so simply because you’ve reached age 62 and above. In fact, postponing retirement can pay dividends on the financial side of the equation. Likewise, if you’re emotionally prepared to retire, but come up short financially, consider whether your plans for retirement are accurate. Evaluate how much of a difference postponing retirement could make, and then weigh your options.
Transitioning into retirement: Financial issues Start with the basics:
If you do not have a projection of the annual income you’ll need in retirement, spend the time now to create one. Factor in anticipated costs relating to basic needs, housing, health care, and long-term care. If you plan to travel in retirement, estimate a corresponding annual dollar amount. Are you financially responsible for other family members or plan to make monetary gifts? With this, you’ll need to include these commitments in your calculations. Be as specific as you can. If it’s been more than a year since you’ve done this exercise, revisit your numbers. Consider an account for inflation.
Don’t forget about your health insurance. Go to www.medisupps.com/aarp-medicare-supplement-plan-f-premiums-2018/ to get rates.