You will no longer have a regular paycheck to be used for your expenses. Here are five things to do the year before you retire, to help you make this transition proceed more smoothly.
1. Have Your House Inspected
Many senior citizens imagine all of the great home improvement projects they will finally have time to complete during retirement. Before retirement, having a professional inspect your house is a wise decision.
They can take care of the deeper issues so that you can work on adding to your home or doing the DIY projects you’ve been looking forward to doing.
2. One-Time Expenses
For life transition involved in retirement, you will need to learn new spending habits. If you have a one-time splurge purchase you’ve been wanting for a long time, like a special antique car or Jacuzzi, you should probably make it before you retire.
It is kind of like celebrating Mardis Gras before you start fasting for Lent.
3. Pay off Debt
You will still need access to capital sources after retiring. It turns out that about one-third of people aged 65 to 74 use credit cards to pay for basic living expenses (such as groceries and utilities) and have high balances on them.
Improve your credit score by retiring some debt before you yourself retire.
4. Prepare Yourself for Fixed Income
Life is full of transitions and retirement is just one of many. Moving from a regular paycheck to a fixed income can be better handled when you plan ahead.
You should carefully prepare the year before you retire: complete important tasks, make a budget, and adjust your assets to properly manage this financial transition.
You might consider visiting a financial advising company like Family Financial Partners so they can help you manage your assets the way you want to.
5. Social Security Benefits
Decide when you will start to collect your Social Security benefits. If you choose to draw these benefits earlier, then your monthly check will be lower.
Though you can technically start as early as 62, your retirement benefits will be reduced by 25 percent or more for the rest of your life. In the long run, you can maximize your Social Security check by waiting as long as possible.
Plan ahead and determine how Social Security fits into your retirement budget.
6. Distribute IRA
For years, you might have been faithfully adding to your IRA, but now it is time to determine how much to remove each month.
You should also consider more conservative income-producing investments to add to your IRA. Discuss your options with your wealth advisor.
Of course, life transitions also involve financial transitions and might require new ways of thinking, saving and spending.
There is no need to fear retirement when you plan ahead. Use the year before you retire to catapult yourself into a fruitful, bountiful, and joyful retirement.
Great checklist for those preparing for retirement. Thanks.
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