You shouldn’t slam on the brakes when retiring, as it can result in a shock to both your finances and emotions. Quitting all of a sudden may cause you to lose a sense of purpose. It’s much healthier to plan for your retirement ahead of time. For example, you can get to an agreement with your boss to work part-time for a bit prior to your retirement, so that you can ease your way out of working. Keep in mind that it’s never too early to start planning for this phase of your life.
Unfortunately, many people don’t plan their retirement because they feel overwhelmed just thinking about it. Even though it may not be a pleasant image to imagine, especially if you love your job, know that it will eventually happen and it’s best to be prepared for it. Ideally, you should start thinking about the future in your twenties. This is probably when you’ll first experience financial freedom. Retirement may be a long way from your twenties, but you can benefit by forming good habits. Research the various compensation benefits you can have and choose only what you need.
For instance, you should think twice about paying for life insurance since it can stop you from maximizing other benefits like your retirement savings program. Note that you can even start setting aside a small amount of money each month during your twenties. Once your savings pile up, you’ll be able to have a very comfortable retirement. With that being said, it’s crucial you know exactly how much money you’ll need to retire.
In case you’re planning to have an active retirement filled with traveling around the globe, then you’ll need to adjust your savings target accordingly. In fact, it may be even a better idea to create a higher savings target than what you’ve initially determined. Worst case scenario you end up having too much money during your retirement. Of course, this all depends on how much you’ll be able to save. But before you start thinking about traveling and similar expenses, you should first consider your health.
Reaching old age can come with a slew of health problems that may end up costing you a lot of money. One of the most important parts of aging includes getting health coverage. Unfortunately, a traditional Medicare plan won’t be enough. Instead, you should think about getting a supplement plan, which you can get from a private insurance carrier. Keep in mind that the best time to sign up for Missouri Medicare supplement plans is during the open enrollment period. In other words, you should do it the first day of the month after you turn 65.
There are also some other things you should plan for like potential long-term care, especially if you don’t have any family members living close by. Going to a nursing home is one of your options when you can’t take care of yourself anymore. However, even if it doesn’t come to that, you still may end up paying in-home care expenses. Planning ahead is extremely important if you want to reduce stress and ease the path from work to retirement.
It’s worth mentioning that you’ll most likely don’t know what to do with all of your free time when you retire. Because of this, you should consider coming up with a new structure for your days. Remember that you’re now able to dedicate a lot of your time to new hobbies. You can even start doing some volunteering in case you miss being productive and around a lot of people. Volunteering is an excellent way to feel fulfilled and make the transition from work to retirement more comfortable. Additionally, you can spend your time doing big projects that you’ve been putting off for years like remodeling or visiting family and friends that live far away.