When to retire? The age old question. Or should I say how old? When it comes to retirement, many people don’t know when the appropriate age is. However, retirement shouldn’t just be about age. There are many other factors that you should consider before you retire. It’s important to think of your financial state, your current investments, and much more. Take a look at our checklist.
Once you retire, you no longer have a regular paycheck. Instead your investment portfolio takes over which you hopefully have been putting money towards over the years. Make sure your portfolio can provide you with the amount of money you need to cover your monthly expenses. It’s also important to look at how much money you have in the bank when you retire. Seniors sometimes only focus on their portfolio and don’t look at their cash in the bank. If you have a lot of cash on hand, you can also invest this into an asset that pays you dividends.
Before retiring, especially as a senior citizen, it’s important to have a plan for what you want to do once you retire. Many times people retire and have no idea what to do with themselves. They are so use to working long hours, that they have no idea how to occupy their time. We recommend coming up with goals for what you want to accomplish during your retirement years.
One of the biggest factors to consider is your health. While your finances are important, it doesn’t really make a different if you’re not around to enjoy it. If you are in great health, you could consider working longer if you want to save more. However, if you or your spouse is in poor health, you should consider taking advantage of what you want to accomplish sooner than later.
The overall health of the economy still makes a big difference for you once you retire. The economy may dictate your retirement portfolio and finances in many cases. Especially in the first few years of your retirement, it’s important that the market is going in an upward trend. If it tanks in the beginning than you could lose a lot of your initial investment.
As you become older, especially as you become a senior citizen, your health care costs will typically increase. Some studies have found that seniors above 65 years old could need between $100,000 – $200,000 of healthcare in their retirement years. Medicare will only cover a portion of your expenses, so make sure you have a healthcare policy that can take care of you financially.
Once you retire you get to take advantage of your social security benefits. Here, your age does make a difference. If you retire too early, you could receive a smaller percentage in your social security payments. If you wait longer you can expect larger payments, which will help your financial situation.
Spouse Opinion On Retirement:
Just like anything in marriage, it’s important to have good communication. Many couples are surprised that their significant other has very different views when it comes to retirement and their finances. You should have an open conversation ahead of time to see what your retirement plans and goals look like, so you’re not surprised later on.