Retirement is an exciting stage of life. You’ve worked hard for several decades to reach this point to get to this point. While retirement can be a carefree time of life, it doesn’t mean you should go into it without a plan. As you approach this new phase of life, there are a couple of things you should do to prepare effectively to ensure you have the best retirement possible.
Decide What You Enjoy
Okay, this first step might seem ridiculous, but many retirees finally reach the age of retirement and begin to realize they don’t know what they want to do. For the majority of your life you’ve probably been working a traditional 9 – 5 job, which leaves little time for hobbies. Once you have all of this extra time, what do you plan to do with it?
So what do you want to do in your retirement? Do you want to travel the world or spend more time at home? Do you want to start exercising more often or stay at home at catch up on the reading that you’ve always wanted to do? Deciding how you want to spend your retirement is the most important step as you approach this wonderful time.
Start Making Your Budget Now
One of the biggest changes that come with retirement is living on a fixed income. Don’t wait until you’re retired to start your budget. Spend several months keeping track of all your expenses. Understanding how much money you spend every month is important in creating a reasonable budget for retirement. Remember that after retirement, a lot of your expenses are going to change. Your transportation costs will go down, but your monthly electric and water bills could go up.
After you’ve created your budget and looked at your expenses, you should be able to find areas that you can reduce your spending or cut out those expenses entirely. As you enter into the new retirement stage, your expenses will change and your budget should reflect that.
Nose Back To The Grindstone?
Now that you’ve decided what you want to do after retirement and how much money you’ll need, you should decide if you will have to/want to work after retirement. Okay, okay, we know you just spent the last half of your life working, so why in the world would you want to keep working? The amount of people that work after retirement has grown drastically over the past couple years. According to the Census Bureau, around 16% of retirees continued to work after the age of 65.
These retirees are continuing to work for two reasons; the have to, or they want to. After making your budget, you might realize that you aren’t able to do their activities you love on your restricted income, but taking a part-time job may fix that.
Other retirees realize that they miss working. Some retirees feel a sense of “loss” or “emptiness” after they quit working. After retirement, you can find a job you love without being tied down every day for eight hours.
Make A Social Security Plan
Many retirees rely on Social Security benefits to help cover their expenses, but when you start collecting those benefits will have a huge influence on how much you receive. The longer you can wait to collect Social Security, the more you will receive.
It just about every situation, it is better for you to wait to receive Social Security benefits. If you wait four years to start collecting benefits, you can receive 32% extra on your Social Security checks. Delaying your Social Security for as long as possible is usually the best option.
Preparing For Retirement
While retirement is a good time for leisure, hobbies, friends, and family, it still requires a good strategy to make sure you enjoy the full potential. Without a plan, you could end up lacking the funds you need to do the things you love.
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