Retirement is one of the most important events in a person’s life. Typically, it’s when you can finally stop worrying about your career and focus on doing things you enjoy. You will have all the opportunities to travel, pursue a passion, and even spend quality time with your loved ones.
However, that is not to say that retirement planning is easy. Retirement has many bumps that will require good decision-making along the journey. If you’re aiming for a long, fruitful, and stable post-working life, here are some crucial decisions you need to make to retire with health and wealth.
The 7 Most Important Decisions You Can Make To Have A Better Retirement
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Retirement is a time of life often put on the back burner in favor of paying bills, raising children, and working a full-time job. While it’s true that retirement can wait until you’re older, it’s never too late to plan for your golden years.
The first decision you should make is to prioritize retirement. Decide how much money you want to save for retirement, and then set up an automatic contribution plan to take the money out of your paycheck before you get paid.
If you don’t have enough money to retire on your own, consider working part-time or volunteering at an organization that needs help with fundraising efforts or administrative work.
Saving up for retirement
Aside from prioritizing your retirement, you must also work out how much money you will be needing during this time and how long it will last.
Budgeting for your entire retirement requires some serious number crunching. However, it’s worth the effort. You’ll want to create an income plan that includes all of your sources of income, like social security, pensions, annuities, and other retirement accounts.
Once you have everything accounted for, you can figure out how much money this equals at different ages, such as 65 or 70. Establishing a budget early in life gives you more time to adjust and possibly save more money for your future retirement plans.
Relocating or downsizing homes
Another aspect you can overlook when nearing retirement is whether you want to move or downscale your home. Both options have their fair share of advantages, so it’s best to consider what lifestyle you want when choosing one over the other.
Downsizing is often one of the best ways to prepare for retirement. It can save you substantial money on utilities, maintenance, and insurance, freeing you up to use the funds for more leisurely activities.
It can also reduce maintenance costs by eliminating yard work and other outdoor responsibilities that can be very difficult for older homeowners, who are often physically limited in their abilities. Conversely, moving elsewhere grants you a change of scenery and an opportunity to get away from old habits and routines.
Additionally, if you move to an area where living costs are lower than your previous residence, it’s also another excellent way to save money.
Claiming your social security
Social security is one of the most important decisions you will make in retirement planning. It’s essential to understand the fundamentals of claiming social security, how much it will pay and where it fits into your retirement plans.
The best time to start taking your social security benefits will depend on factors like age, with social security paying more if you wait longer to begin taking benefits.
For example, if you wait until age 70 instead of claiming social security at 62, your monthly benefit would be higher. However, waiting too long can result in less total income over your lifetime. it all depends on the situation and how much money you need to live comfortably during retirement.
Securing a reliable financial advisor
A financial advisor can help you make good retirement savings and investment decisions. They will review your current situation, develop a plan for the future, help you set your retirement goals, and determine how much money you need to save to achieve those goals.
Financial advisors can also benefit if you have little experience investing or managing your finances. When it’s time to make investment decisions, some people feel overwhelmed by the number of options available and may not know where to begin.
A financial advisor will navigate these decisions and select the best options for your needs. Having a legal professional to guide you can significantly reduce stress and anxiety and save time researching options when it’s probably better spent on other things.
Working during retirement
While it may seem counter-intuitive to work during retirement, some people can’t help it and need something productive to do, making it essential to decide whether you’ll work again beyond employment. If you need the money, that decision might be easy. However, if you’re not keen on working, you must consider what you’ll do with your free time.
You may want to consider volunteering or starting a small business, but don’t feel pressured into taking on too much. You’ll want to ensure that your work is something you enjoy and will sustain you for the long haul.
Some great ways to make money from home include selling items online and even side hustles like delivering food. The good thing about these opportunities is that they’re flexible. Suppose you don’t like what you’re doing one day. There’s no reason why you can’t stop and try something else the next day.
Timing your retirement
As we’ve established, there are a lot of important decisions to make before you retire. Some of these decisions are about the financial planning and investments that will help you prepare for retirement. Others are about the lifestyle and living arrangements that will bring you happiness during your golden years.
However, one decision can affect every other aspect of your life: knowing when you plan to retire. The earlier you know, the more time you’ll have to prepare financially, which could make all the difference between an enjoyable retirement and one filled with money worries.
Preparing For Your Best Years
Most think about what they want to do post-employment, like the vacations they’ll take, the people they’ll meet, and the new things they want to experience. However, the ideal retirement takes extensive planning and proper execution.
If you’re near retirement or want to prepare early, let this serve as your guide regarding the decisions you need to make for a better retirement.