By the age of 65, many people are ready to enjoy retirement and all the perks that can come with it — golf, travel, and time spent with grandchildren. But many seniors are also forced to navigate age-related health, mobility, and agility complications. To prepare for whatever life brings during your upcoming retirement, you must be well prepared to build a financial cushion that can fund both what you envision and the unexpected. Follow these tips to help you plan for your golden years.
Pay off Debt
Retiring with significant debt is often viewed as a cardinal financial sin. You deserve to spend your money on the things and experiences you enjoy, not on repaying old debts. To ensure that you’re well prepared for your retirement and to minimize any potential financial burden on your family, reduce your current debt by paying down your credit cards, making sure your bank accounts are in order, and regularly contributing to your retirement fund.
Tackle additional financial responsibilities such as lingering student loan debt or remaining payments on your mortgage as well. If you plan on staying in your home and aging in place, you may want to consider refinancing your mortgage to help save some cash in the long run.
Calculate Your Income and Budget
Retirement is a milestone. But can your current financial situation support the retirement you’re working toward? Estimate your fixed monthly income from Social Security and employer pensions. The rest of your retirement fund will come from your wages, savings, and investment accounts. A popular rule of thumb is to spend around 4% of your retirement portfolio annually. Let’s say you have $1,500,000 in retirement assets. Using the 4% rule, you could afford to spend about $60,000 a year. Is that enough to finance your day-to-day life and any extras, such as traveling, without having to worry about running out of money?
Look into all of your sources of income early. This will give you time to adjust your savings and retirement strategy if needed. If you’re worried that you may be behind on building your retirement nest egg, consider extending the date of your retirement, try cutting down or cutting out nonessential spending, and consider getting a part-time job during retirement for extra spending money.
But you’ll have to take more than your everyday expenses and the occasional trip into consideration! Some expenses, such as health care, may increase later on in life. To ensure that you can handle medical issues without the added stress of money, you’ll want to establish a sizable emergency fund as well. Remember, what you save today will determine how you live during your retirement.
Review Your Estate Plan
While estate planning is no one’s favorite subject, it is important. To spare your family any legal tie-ups and to help ensure that your wishes are respected, you’ll want to be prepared. Go through the inside and outside of your home and make a list of your valuable items, including the home, jewelry, antiques, family heirlooms, power tools, and vehicles. Once you’ve created an accurate inventory of your possessions, you can decide where it should go or who it should go to after your death.
Review and update your will and trusts, designate account beneficiaries, determine your financial and medical power of attorney(s), and the executor of the estate. You can also write a letter of instruction as a step-by-step guide for any additional details such as your wishes for funeral preparations or what you’d like done with your social media accounts.
Consider consulting an estate attorney and/or a financial planner to make sure you’ve covered all of your bases.
Downsize Your Space
Whether you’re looking to simplify your life, cut costs, or move closer to family, many seniors downsize in their golden years. Saying goodbye to the place where you built your life is never easy and neither is decluttering it, so you’ll want to start early. Many seniors choose to continue living independently. They buy smaller, more accessible homes and sell their current home to finance the purchase. If you’re making living decisions on behalf of a parent, take their future agility, mobility, and caregiving needs into consideration. They may be more comfortable in a senior living community.
Downsizing can feel bittersweet, but there is a new and supportive living environment to look forward to and, for many, that can help ease the transition.
So, are you ready to live the retirement good life? The possibilities and adventures that await as you enter your golden years are endless. By preparing early, you can make the later years of your life some of the most exciting and meaningful.
Pines Village Retirement Communities, Inc. is a nonprofit senior living community in Valparaiso, Indiana, with two campuses: Pines Village and Meridian Woods. The Pines Village campus offers pet-friendly independent living apartments with the option to add assistive services à la carte or in packages. The Meridian Woods campus consists of maintenance-free paired homes and Campbell St. Cafe, which, in addition to being a restaurant open to the public, hosts events and acts as a meeting space for residents and local nonprofits.
At Pines Village, we celebrate life by enriching the lives of older adults. We pride ourselves on our culture, which is driven by a passion for serving the residents, visitors, and staff of Pines Village as well as the greater Valparaiso community. Explore our senior apartment availability, learn more about our assisted living options, or contact us with any questions today!
