When it comes to plans for retirement, the old adage “the earlier, the better” quickly comes to mind. One of the main reasons for beginning your retirement planning early is so that you can set up a plan that will carry you well into your senior years. Of course, you will want to see a financial advisor to answer your questions and help you set up such a plan.
Many times we get busy with life and forget the most important areas such as our finances. We are focused on our day to day life and time slips by so quickly that our retirement arrives and we are not equipped for what comes next. That being the case, we have five important suggestions as to what you can do to get yourself prepared for the big day.
Make sure you pay off outstanding debts – One of the best things you can do for yourself is to pay off your outstanding debts as soon as possible. That includes paying off your house. You do not want to go into your retirement years still owing money on major items such as a house, cars, credit cards, and so forth, especially those that are hedged against your plans for retirement. If you don’t, you’ll probably be paying them out of your pension and or personal savings, an incredibly bad idea for a retired individual.
Make sure your paperwork is in order – Having your important papers in order is something you should take care of throughout your adult life. It is especially important when you are getting ready to retire. At least a year before you retire, if you haven’t already, start doing the necessary paperwork for your retirement. Birth certificates, passports and other identity papers should help smooth your transition into your new role as a retiree.
Make sure your health benefits are in order – Always check with the employee benefits department six months to a year before retirement. Ask them how your health insurance will change once you’re not a member of the company. Depending on the answer, you may have to look around for new or additional insurance for yourself. Also, take into consideration any continuing ailments that you may have. Covering them with health insurance is a good idea, since they may take out a significant part of your retirement income.
Make sure you prepare a budget – Check what your income sources will be after retirement. This can be from your employer – with the company’s own pension plan – Social Security and your own personal savings. After that, prepare a budget that would fit your upcoming financial situation. You really need to do this well in advance, so that you may be able to change it for any required adjustments such as paying for new medical insurance and other expenses that may pop up. A year should give you a large enough margin to prepare. If you’re having trouble balancing it all, a financial advisor is a good investment. Try to find one that has a good solid reputation so as to avoid any problems.
Make sure you prepare a new tax payment plan – Switching from your salary to your retirement income is a big change but you still have to pay taxes for that change. After retiring, check with your tax advisor on what forms you’ll need to submit. You will also need to understand how to set up a good payment plan so that you’ll be able to maximize what you can out of your payout for your retirement.
Making sure you take the proper steps in your plans for retirement, and completing the appropriate paperwork will help you remain fiscally solid during those years. The last thing you want to do is to spend your golden years worrying about your finances. Have everything in order and you can enjoy your much earned rest.