Are you planning to retire soon? If so, you’re in good company. In the next seven years, approximately a fifth of the U.S. population will reach the traditional retirement age of 65. This is an exciting but potentially overwhelming time. Here are five things you can do to put your best foot forward in this next phase of your life.
Maximize Employer Benefits
Determine your pension eligibility, review other retirement benefits through your employer, and consider maximizing contribution limits in your retirement accounts. You can save up to $30,000 in a 401(k) or $7,000 in an IRA. You may have an open 401k through a previous employer. Contacting the HR department with your details (such as your social security number) can connect you to those funds. Do you have health coverage through your job? Take advantage and schedule some dentist or doctor visits.
Determine Social Security Payment
Social Security benefits will likely be an important source of income for you in retirement. Find out how much you can expect to receive in benefits by visiting SSA.gov. While you’re eligible to claim payments beginning at 62, your full retirement age varies depending on your birth year. You may also want to consider delaying your Social Security benefits to receive a larger monthly payment. Payments grow by roughly 8% every year up to age 70.
Assess your Financial Picture
Review your current debt and determine how much you’ll need to cover basic needs. This includes housing, food, and healthcare as well as discretionary categories such as travel or hobbies. A budget will show monthly income from Social Security, pensions, or part-time work and what you can afford to spend.
Sign up for Healthcare
You can enroll in Medicare beginning at age 65. Healthcare costs can be a major expense in retirement, so it’s important to plan ahead. Consider buying additional health insurance to cover any gaps in Medicare coverage. Be sure to factor in the cost of prescription drugs, too. You may also want to register for a health savings account (HSA) to help you save for healthcare expenses tax-free.
Meet with a Financial Planner
Your financial institution may be able to connect you with someone who can review your retirement portfolio and suggest adjustments. For example, transferring 401(k) funds to an IRA or Roth IRA for more investment options and to diversify your holdings. A financial planner can also help strategize your budget. Reflect on what you want this time to look like and be intentional in communicating your goals.
Take a Closer Look
Any time is a great time to refresh your retirement goals and commit to your financial health. Through our partnership with GreenPath Financial Wellness, you can connect with a caring financial counselor to review your specific situation.
