Welcome to the year of your retirement! After dedicating your adult life to hard work, smart saving, and delayed gratification, you’ve earned it. As you move forward into this exciting new phase of your life, it’s important to make sure that you’ve checked all of the right boxes so you can enjoy your retirement in peace.
Consider the following five steps to help you get prepared.
1. Establish a Budget
Depending on the nature of your professional career, retirement may be the first time in your life that you won’t have a paycheck deposited into your checking account every two weeks, and it can be a major adjustment.
Before you take the plunge into retirement life, set aside some time to establish a budget. If you’re 62 years or older, your budget should take into account potential social security benefits and how they may impact your retirement accounts or savings. A clear budget will enable you to plan your spending with precision. If budgeting is new to you, consider working with a financial professional to analyze your unique retirement situation and establish a budget before you retire.
2. Take a Close Look at Taxes
As you retire, you may find that your taxes become more complicated than before. Some accounts allow tax-free withdrawals, others are taxed as ordinary income, and some retirees find themselves having to pay capital gains taxes. When it comes to your post-retirement taxes, preparation is key. If you’re planning to retire this year, now is the time to start considering your future tax planning to ensure you don’t have any surprises in retirement.
3. Stash a Bunch of Cash
The stock market moves up and down with shifts in the political landscape and current events – this is normal. But, as you retire, it’s important to have cash savings available. Cash savings help you be prepared for surprise health emergencies, natural disasters, or even exciting unplanned purchases. Most experts advise having enough in the bank to cover at least a year’s worth of expenses.
4. Pay Down Your Debt
Being debt-free is a fantastic feeling! After all, if you’re deep in credit card debt you are limiting your retirement freedom. Set the priority of becoming debt-free now and you’ll be able to roll into your retirement years with one less drain on your income. We promise you’ll be grateful later on.
5. Rate Your Risk
Once you retire, you’re going to want to adjust the way you’ve managed your portfolio. Stocks, bonds, and cash each come with certain opportunity costs. Make sure you understand your willingness to accept risk and adjust accordingly.
Each new year comes with new opportunities. If this year holds retirement for your future, congratulations! There is no better time than now to begin preparing for your financial future.
The best news is, you don’t have to do it alone. If you’re looking for a partner to help you meet your retirement goals, you’ve come to the right palace. Contact us today so you can go into your retirement feeling confident about your future.