Retirement Planning Tips

Before you pop the champagne bottle to celebrate your retirement, there are some things that you must do to make certain that your retirement years are as golden as you have always dreamt about.

Here is a list of tips that can secure a happy and financially stable retirement.

1. Know your retirement needs and goals.

    It is important to plan your retirement needs and goals are ahead of time, so that you are able to determine much money you really need to save. If you need long term health care coverage or if you dream of going on a trip to Europe after you retire – you will want to make sure that you plan for those items, as well as other payments that you make regularly, like utility and health insurance. Knowing your plans ahead of time can help you make sure that you are saving enough for your retirement.

2. Do not borrow from your retirement savings.

    Some people choose to borrow from their 401(k) or retirement savings. It is not a good idea to dip in your retirement fund, even if it is used to pay for your child’s school or to pay bills. As noble as those reasons are, you need to remember that there are other factors that may affect your savings and you should be prepared for those emergencies. Be aware that there are tax penalties for withdrawing retirement savings early, so it it best to contact a tax professional if you are considering this option.

3. Understand your investments, Social Security benefits and pension plan.

Are you familiar with your Social Security benefits, 401(k) and pension plan? Review all your benefits and disbursements rules and requirements prior to your retirement to ensure that you have a good understanding of each process. It is a good idea to make sure you understand how your pension plan works and to see how your investments will work for you. It is also important to know that if you start collecting your Social Security benefits at 62 (the youngest you can begin collecting), you will receive smaller checks, as opposed to when you are full retirement age at 67. A financial adviser can help you familiarize how your finances can work for your retirement.

4. Don’t underestimate healthcare costs.

It may not be a good idea to rely on Medicare as your only source of health insurance. Many times, senior citizens underestimate how much money they will spend on their health care. According to an AARP report, it is estimated that a retired couple can spend up to $240,000 in healthcare during their retirement years. The out-of-pocket costs are used to pay for expenses such as prescription medicines, deductibles and copayments, dental services, as well as needs such as glasses and hearing aids. This estimate does not include long-term care costs.

5. Research other ways to help finance retirement.

    Applying for a reverse mortgage may be a great way to help finance your retirement if you are 62 years of age or older. One of the benefits of a reverse mortgage is that you are not required to make monthly payments. The extra financial cushion from not making monthly mortgage payment and receiving your reverse mortgage loan can help maintain your quality of life during your retirement. Your reverse mortgage loan can be used for anything, including long term health care costs to home repair to even financing a post-retirement vacation.

If you are interested in learning more about how reverse mortgages can benefit you during your retirement, you can speak with an advisor at 1-888-808-8486. You can also ask questions by sending us a message here.

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