Retirement is when you leave work permanently, especially due to aging. Indeed, this phase is supposed to be for resting after long years of tireless hard work. Despite this, statistics indicate that only 43% of Americans can afford a comfortable retirement. The last thing you want is to struggle with life, especially with no stable income. Fortunately, you can avoid being part of the statistics by planning your retirement carefully. This process will require you to make important decisions to fully enjoy this phase of your life. Here are a few worth considering.
- The right time to retire
The first decision is knowing when to retire. Certain signs indicate you’re ready for a comfortable and pleasant retirement. Of course, you must retire when you hit the legal age for this. People born between 1943 and 1954 usually leave work at 66, while those born after 1959 retire at 87. Those born between these dates retire at 66 and some months. However, you don’t have to wait till old age to take a permanent break from corporate work. You can do this and live a great life if you’re debt free, have a practical retirement budget, and have a good investment portfolio. You can also consider this option if you don’t have children or parents to care for, so keep this in mind.
- Living arrangements
Indeed, where you live can significantly affect your quality of life and finances, making it essential to make the right decisions. Admittedly, living in your current home can be beneficial, especially if it’s close to family and friends and it’s mortgage-free. However, this is not the case for many retirees. If you estimate that your home will take a large chunk of your retirement funds, you can consider downsizing to a smaller home. This is especially beneficial if you are an empty nester, so keep this in mind. Consider working with credible real estate agents to sell your home for a great price. You can also decide to live in a nursing or care home, as it has advantages.
First, you can maintain an active social life by mingling with and interacting with other retirees. Likewise, you don’t have to worry about food preparation or other household chores; dedicated workers handle these tasks to ensure your stay is pleasant. Admittedly, some facilities can be costly, so considering your financing options before paying for a care home is beneficial. You can also choose to live with your children if it would not be inconvenient for you or them.
- Healthcare
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Healthcare becomes increasingly significant as you age, making planning for it before retirement essential. This way, you can ensure you’re properly cared for should illnesses and other medical conditions arise. While you may be eligible for social security, it may not be enough to cater to your healthcare needs. Therefore, experts recommend looking into other sources to cover this expense. For instance, you can open a health savings account before you retire. This account has tax benefits such as tax-free withdrawals for qualified medical expenses, tax-deferred growth, and deductible contributions. Investing in long-term care insurance is also ideal, so keep this in mind.
