5 Financial Decisions You Need to Make In Preparation for Retirement

28 Sep 2018

In preparation for retirement, you’ve got to think long term, especially when it comes to your money. Here are 5 decisions you need to make for with your money.

For many people, it seems like retirement is light years away. However, it might be closer than you think considering up to 46 percent of US retirees leave their work early.

If you don’t think you’re as well prepared for retirement as you might think, this article is for you.

Follow these article for 5 preparation for retirement tips you can follow to give yourself a head start.

1. Make a Retirement Budget

Although you might have a budget you rely on and stick to right now, the scenario will look completely different after you retire.

The best financial decision you can make to prepare yourself financially before your retirement is to make a budget.

Have an estimate of your total monthly expenses once you’re retired and compare it to the one you have now so you can make the necessary adjustments.

2. Build a Retirement Emergency Savings Account

Even if you’ve spent a great deal of time planning for retirement, from time to time, there can be some delays with the disbursement of your retirement pensions.

In order to avoid any hiccups when you retire, make sure you create an emergency savings account solely for this purpose.

You should keep at least three months worth of living expenses to get you by in case there are unexpected setbacks.

3. Look Into Health Insurance Coverage

You should keep in mind that Medicare doesn’t begin until the age of 65. And even then, Medicare will only cover about half of your medical expenses.

Before you retire, you have many decisions to make when it comes to health insurance. If you retire before the age of 65, you will have to find health coverage for yourself since you will no longer have your employer to cover some of the expenses.

When you retire at the age of 65, you will be able to sign up for Medicare, but what will you do about the other half of your medical coverage?

You will also need to look into supplemental health coverage to make up for the other half Medicare doesn’t cover.

4. Downsize on Debt

Chances are the last thing you want to do when you head into retirement the last thing you want to do is deal with debt.

Since these are your golden years, you should rid yourself of any unnecessary financial burdens.

To prepare, make a list of all of your outstanding debts including mortgages, credit cards, car payments, student loans, and more.

Pay off as much as you can, and you will free off income for your retirement.

5. Create Potential Scenarios

Another thing you can do to prepare for retirement is to create potential scenarios to play around with the idea of retirement.

What you need to do is come up with different solutions to factors such as inflation, the rate of return, and even potential medical expenses.

Preparation for Retirement: The Bottom Line

Don’t let your golden years become all about financial worries and prepare beforehand. Take these tips into account and give yourself a head start.

Need a little help with your preparation for retirement? Let Solera Asset Managers help you. Contact us to schedule an appointment today.