11 Important Things to Do Before Retirement and More
We all enter the professional world at a young age and continue working till the age of retirement. Yet, during all these years, we dedicate our lives...
We all enter the professional world at a young age and continue working till the age of retirement. Yet, during all these years, we dedicate our lives to work and rarely devote time to everything we would love to do.
Then, retirement comes, and we finally feel like we have the time to do all the things we have ever wanted to enjoy. That’s why retirement is regarded as one of the most enjoyable times of our lives. But, these words only present half of the truth.
“Retirement: A time to do all the things you never had time to do when you worked.” – Catherine Pulsifer
These words by Catherine Pulsifer reflect a deep truth — and give thoughts to making decisions and planning before retirement.
If we do not do important things before we retire, we may risk not having an enjoyable — let alone a dependable retirement.
We may even get burdened by different kinds of worries. Who wants that? So, let’s discuss 7 important things that you should do before you retire to have an enjoyable life after retirement.
11 important things to do before you retire
Bid Adieu to debt
Imagine paying some debts even after retirement — even small debts can become too great a strain in retirement. How would that be? Retirement is your time to enjoy at least in a small measure — and you want no kind of debt.
You want to be able to travel and maybe, as an entrepreneur — start a different company if you want.
However, once you retire, you’ll only have a fixed income to cover your monthly expenses. Under such circumstances, having to pay off additional debt from your fixed income can leave you living in stress and scarcity (you’ve had enough of that through your career.
People who retire without mortgages usually have less financial worry and insecurity after retirement.
So, before you retire, it is crucial to bid adieu to debt. For this, you can create a plan to clear your debts before you retire. But, take care not to compromise your retirement savings to pay off debt because that, too, can stress yourself too much in the process.
Here are tips to help you pay off your debt before retirement
Start a side hustle:
If you feel that your current income is insufficient to help you pay the debt before retirement, you can start a side hustle.
If you choose a side hustle that you would love to engage in, like photography, handicraft design, and managing social media for small businesses, then you wouldn’t even have to feel stressed.
In the words of Marc Anthony, “If you do what you love, you’ll not have to work a day in your life.” So, try to choose a side hustle that doesn’t lead to additional stress in your life while helping you make some extra money to pay off your debts in time.
Minimize credit card usage:
Interest rates on credit cards are really high. Howard Dvorkin, the CPA and chairman of debt.com, says, “Right now, credit card interest rates are hovering around 20%.”
This stat implies that you are paying a dollar for every five you borrowed. Such high rates of interest can not only eat away your current income, but can also leave you struggling during your retirement years when you’ll have to live on a fixed income.
So, you must minimize credit card usage now — and all excess spending. But, of course, if you can stop using your credit card, that’s even better.
In the case of federal student loans, try seeking loan forbearance:
Many times people carry student loan debt into retirement. In 2017, the Consumer Financial Protection Bureau found that around 2.8 million adults over age 60 carried student loan debt at an average balance of $23,500.
Having to pay your student loan debt in retirement can reduce your standard of living. Pay your student loan debt before retirement. If you fail to do so, you should try to seek loan forbearance for federal student loans.
- Buy the best life insurance plans and policies:
If you are the primary breadwinner in your family, you need to ensure your own and your family’s future after you retire.
Life insurance plans and policies can help you with this. Life insurance is a financial product that ensures that you and your family receive proper financial support in times of need.
This means that life insurance policies can provide you financial security after your retirement. But, this is not the only benefit that you can avail yourself of through life insurance.
Life insurance can also help you save on taxes. You can avail tax deductions for the life insurance premiums paid. So, you should try to buy the best life insurance plans and policies for your future.
Further, if you already have life insurance through your employer, even then, you must buy life insurance policies for yourself personally. This is because once you leave your job, your life insurance will no longer be valid, and medicare insurance is not all you think it should be. You must have supplemental medical, dental, and prescription coverage to survive retirement.
Calculate the expenses you’ll have to make once you retire:
You can enjoy your retirement wholeheartedly if you don’t have any money-related worries. Otherwise, your retirement will become stressful for you, and you won’t be able to enjoy your so-called golden time.
To prevent difficult money issues from happening, calculate the expenses you’ll have to make once you retire — and check if you have adequate plans to fulfill your financial needs.
Retirement savings, life insurance cover, the pension you’ll receive are examples of things that you’ll need to consider. If your estimation says that you will lack resources during retirement, then you must take action right away and get as much money saved as possible.
For example, you can try to cut on your expenses and put more in your retirement savings. You can also start a side hustle to earn more.
Here is how to cut down on your everyday expenses, now
Check your spending habits and identify places where you are overspending:
Many times we overspend unconsciously. Things have us tempted, and we tend to buy them even if we don’t need them.
For example, I have an inclination towards soft toys. Whenever I see a beautiful soft toy that captivates my heart, I am drawn to buy it. But then I realized how much I overspent in a year because of this love for soft toys.
So, the first thing you need to do to save more money is to check your spending habits and identify places where you overspend.
Create a proper monthly budget:
You know the word budget is not a filthy word — make it your friend. Creating a monthly budget and sticking to it is one of the best ways to save money.
No doubt, it is rewarding, but it is hard to implement too. However, if you stick to your budget and keep saving, you’ll experience the joy of saving in a short amount of time, which is much more than the joy of spending.
You can put all the money saved in your retirement savings and pave your way towards a secure retirement.
Cut down on your utility costs:
According to experts, your utility costs should be no more than 8-10 percent of your monthly income.
It may seem hard to cut your utility costs if you are in the habit of spending a lot of money on them — but for your future, you’ll have to cut these down. Moreover, cutting utility costs isn’t as hard as it seems. You can easily reduce your electricity bills and water bills by ensuring that all the faucets and appliances remain off when not in use.
Along with this, you can also make sure that your electronic devices like Air conditioners function at the maximum of their efficiency. Such simple steps can really help you save money and put it in your retirement account.
Bid adieu to credit card usage:
As mentioned above, credit cards have high-interest rates. Therefore, to save to the best of your ability — it is crucial for you to bid adieu to credit card usage, or try to use your credit card at the minimum.
Moreover, it would be best to try to pay your entire credit card bill off regularly. Failing to pay on time means that you’ll have to pay late fees and higher interest rates. So instead, pay off monthly — or set up an auto-pay.
Cut costs on transportation:
Data has shown that Americans spend around 13% of their household expenditure on transportation.
Along with this, it has also been estimated that, on average, Americans own 2.28 cars. This means that most households own more than one car. In addition, having more cars means family members are likely to use individual vehicles to commute to places.
If this is true for you too, it is time to cut costs on transportation. You can try to use one vehicle to commute together if you have to visit places that are close to each other.
You don’t need to take this action until you retire — but this will help you save money on fuel expenses and vehicle maintenance. As a result, you’ll be able to put more money into your retirement savings.
Before you retire, it is crucial to have your estate plans in place. Estate planning involves deciding who will receive things you worked hard for during your lifetime if you become incapacitated or die.
No doubt, this may not seem a fun thing to think about, but you must do the work and make an effort to have estate planning completed.
Estate planning protects young children, beneficiaries and also prevents family messes. Of course, you can also go for estate planning after you retire, but if you want to spend most of your time after retirement in a relaxed manner, it is better to do it early on.
Estate planning should include these actions
A will ensures that your property gets distributed according to your wishes. Unfortunately, many people believe that a will is something that only rich people can have. But, this is not true.
Everyone who owns a property should create a will — and those with substantial savings accounts. It prevents your property from falling into the wrong hands, disputes between family members, and ensures a higher likelihood that peace prevails in the division of your assets.
- Power of attorney:
Through a power of attorney, you give a person the right to act on your behalf when you cannot do so. It enables them to make the decisions which you would have taken otherwise.
You may wish to make a medical power of attorney, too. Have one person over your physical assets, and a different person over your physical body.
- Beneficiary Designations:
Beneficiaries are individuals, trusts, or companies that receive the assets of the estate.
For example, you may make your children the beneficiaries of your estate. But, it is important to note that the beneficiaries should be above the age of 21 years.
- Guardianship designations:
If you have minor children, it is important to make guardianship designations.
Having a permanent designation in place will help you ensure that your children live with a family that you have chosen for them. Otherwise, the court will make this decision, and your kids may end up living with a family that you would have never chosen for them.
- Healthcare Power of Attorney:
A healthcare power of attorney gives the person you name, the power to make important healthcare decisions in case you become incapacitated to do that. So, it is also an important element you should take care of when creating your estate plans.
Additional Thoughts on Retirement Helps
Sort out your end of life plans:
“Live before you die, so that death is also a lively celebration.” –B.K.S. Iyengar.
Iyengar’s words highlight what we all should ideally do. But, most of us do not live fully. So, ask yourself, do I live fully?
You may be an exception, but the truth is that most of us don’t take the time to craft a life — we just muddle through. We spend most of our time working and have very little time doing things that make us feel alive.
If you really want to live before you die, don’t forget to sort out your end-of-life plans before you retire.
Once you retire, you can do many things you wanted to do when you were young, but never got the chance to because of work or other engagements.
You won’t want to spend even a minute of your days after retirement on making plans and figuring out ways to make them work.
Start now and create your bucket list — On your list, put in items, destinations, and wishes you’ve held close to your heart all these years.
Begin to generate a rough idea of how you’ll do these things. For example, if you want to travel to a foreign country, create a plan regarding the places you would love to visit, people you would love to take along, how long you would like to stay there, and so on.
Save for those things on your bucket list you’re planning and would love to do during retirement.
Here is one of the most important things that you should do before retirement. Once you have created a list of all the things that you would love to do, it is important to estimate the expenses that will be involved.
The estimation is fundamental to ensure that you don’t fall short of the money required to fulfill your dreams later in life.
After estimating the expenses that will be involved, you should try to make suitable savings for after retirement merriment. For savings, you’ll want to create a separate savings account.
You may also use your retirement savings account for this purpose, but it is usually better to keep things separate. Retirement merriment and bucket list expenses are different from other retirement expenses — but you really want to enjoy the dream and prepare well.
Plan for your long-term life care:
According to the American Association of long-term care, around 7.5 million Americans had some form of long-term care requirement by January 2020. Our body is meant to age — and wha-la — it does.
As we age, we may become susceptible to various kinds of health problems, making it crucial to plan for long-term life care before retirement.
If you plan well, you can make your long-term healthcare expenses without getting stressed over them. Moreover, a good long-term life care plan will ensure that your family doesn’t get burdened by your health expenses.
Purchasing a long-term care policy and opening a health savings account are two great ways to plan for your long-term life care.
“What do you call a person who is happy on Monday?” RETIRED!
Life after retirement is the life you have planned for — saved for — and now, you can actually enjoy living this crafted life.
Once you retire, you don’t have to spend your days rushing to complete work in time and receive your paycheque at the end of the month. Instead, you’ll have plenty of time to accomplish the many goals you have set for yourself and saved for all these years.
You already know the world we live in — You already know that many, many enjoyments come with a cost – and that cost is usually money.
If you don’t have a sufficient amount of money, financial stress will hover like dark clouds at this time you have prepared for and looked forward to with joy.
Start now — save enough money for your retirement, complete all other responsibilities well and work on creating the best retirement life for yourself.
Wishing you All the Best, and your best life yet — in your retirement years.
The post 11 Important Things to Do Before Retirement and More appeared first on Due.