Retirement is an enjoyable time for you get to kick back, relax, and enjoy your golden years. However, the quality of your retirement depends on how much thought and planning that you have put into it. If you are anticipating retirement soon, here are three things that you should do beforehand.
Determine Your Retirement Income and Budget
To live out your ideal retirement lifestyle, you need to make sure that you have the right income to allow you to live how you want. If you’ve been planning for your retirement properly, you are going to have several income streams to safely fund your retirement. These are a few of the major income sources you will be relying on during your retirement.
- Social Security. Social Security payments typically make up most of a retiree’s consistent income. You can expect to receive an average of $1,400 per month in payments, but you may receive more if you wait longer to begin your benefits.
- Retirement Savings Accounts. If you were wise enough to begin storing money in a 401(k) or a Roth IRA while you were working, you can dip into these savings once you begin your retirement.
- Pensions. In some cases, working for a company or employer for a few years or more might mean that you are eligible for a pension plan. Depending on how much you and your employer contributed during your employment, you may have a significant amount of money to draw from this source.
- Annuities. If you weren’t able to get a pension, you may have purchased an annuity, which is essentially the same concept except that you purchase a plan from a financial institution rather than an employer.
- Investments. Having investments is an important part of preparing for retirement. Depending on what you decided to invest in earlier in life, you may have a lot of steady income to draw from or you may have investments that bring in variable amounts of income to help you afford random expenses.
Once you have a better idea of what income streams you have at your disposal and how much you will be making, you can create a budget to help you plan for retirement. Start with the bare necessities such as food, bills, and other fixed monthly expenses that you have to take care of. Then, determine how much you will have left and what kind of things you want to do during your retirement. If you can’t afford your desired lifestyle, you can always figure out other ways to make money during retirement.
Make a Plan for What Type of Activities You Want to Engage in
Retirement is the opportunity you’ve been waiting for to do all of the activities that you didn’t have time for when you were working. Right before you retire is the perfect time to figure out what you want to do with your free time. If you’ve always wanted to go fishing, start crafting a plan that outlines what type of fish you want to catch and where you want to fish. If you’ve been interested in writing you own novel, get your hands on a computer and start typing. Whatever it is that you want to do, make a plan to do it during retirement. This will help you to make sure that you stay occupied and remain entertained during all of your free time.
Figure Out Where You Want to Live
Those who are retiring may decide that they want to move and station themselves in a different place. For some, they may want to purchase a new home or continue living in their own throughout their retirement. Others may want to join other people their age in a place such as a retirement community in Sydney. It’s important that you figure this out before retirement so that you will be better prepared for the financial aspects that will come with your new living situation.
Retirement is an amazing experience but it is important to prepare for it beforehand. If you plan on retiring soon, use the three tips above to help you make a smooth transition into your retirement.