Retirement is an exciting time filled with new opportunities and the free-time necessary to pursue your passions. When you retire, you’ll be able to live the life you want, and you’ll get to do the activities that make you happy. To make your retirement smooth and relaxing, it’s a good idea to spend the months leading up to the big day getting things ready. Before you officially retire, you’ll want to get your finances in order, and you’ll want to start creating a plan for how you’ll spend your retirement. Before you pack up your desk and cut the cake at your office’s retirement party, here are nine things that you must do to get ready for retirement.
1) Set-up and Test Out your Retirement Budget
When you’re a retiree, your finances might look different from what you’re used to now. Because of that, it’s a good idea to create a retirement budget before you retire. Calculate how much you’re expecting to get from your pension, Social Security, and investments each month. Then, put together your monthly budget. As you’re putting together your budget, make sure to leave room in there for the leisure activities you’re planning on doing during your retirement. To make sure your budget works for you, test it out before you retire. Stick to your retirement budget for a month or two, and if it’s not working for you, find ways to adjust it. When you do this, you’ll have a budget that you’re confident in by the time you retire.
2) Get Rid of Risky Items in your Financial Portfolio
The closer you get to retirement, the less risk you’ll want to take in your financial portfolio. When you’re in your twenties and thirties, you can afford to invest in some riskier stock options that have high rewards if they work out. However, when you’re just a few years from retirement, it’s best not to take these risks. A wrong move could result in you having a much smaller nest egg once you retire. When you’re near retirement, it’s best to invest in some lower-grade bonds. These may have lower return rates than other stock options, but they’re also not as risky. When you’re thinking about retiring, meet with your financial planner, and ask them to assess the risk profile in your portfolio. They’ll help you decide which items you should and should not keep.
3) See your Doctors
Before you leave your job, it’s a good idea to visit doctors that are covered under your employer-sponsored health insurance. Have your doctor do a check-up, and get all your prescriptions refilled. It’s especially important to do this if you wear glasses, have hearing aids, or need your teeth checked out. Medicare Part A and Part B do not cover routine dental procedures, like fillings and cleanings. They also don’t cover eyeglasses or hearing aids. When you go on Medicare, you’ll have to learn the ins and outs of the system, and you may have to find new doctors who take Medicare. If you see your current doctors before you retire, you’ll be able to wait a few months before you have to start figuring out your new healthcare, and any supplemental policies you may need.
4) Pay Off High-Interest Debt
Having to pay off debt can eat into your nest egg over the years. Because of this, try and pay off as much debt as you can before you retire. This is especially true for high-interest debt, like credit cards. If you can, try to make bi-weekly payments on your credit card in the months leading up to your retirement. Also, try and use the card as little as possible when you’re out and about. Also, try to pay off student loans and auto loans before you retire. This way, you won’t have to worry about paying the interest on those loans when you leave work. Try to find places where you can cut back a bit in spending each month, and put that extra money toward paying off your debts.