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You spend years working to collect a paycheck, provide for your family, and save enough to retire in comfort one day. Setting up a strong future for yourself is only possible when you take the necessary steps early. This guide reveals the six most important things to do before retirement so you can have a seamless transition to retirement life.
Maintain Good Health
You want to enjoy your golden years, so one of the most important things to do before retirement is to take care of yourself physically and mentally. Your health should be your top priority so you can enjoy your much-deserved free time and limit any medical costs that health insurance doesn’t cover.
Keep up with routine doctor’s appointments, take all your prescribed medications, and follow a healthy diet and exercise plan. You’ll feel better and reduce the chance of facing serious health concerns in retirement.
Secure Your Financial Future
Along with taking care of your health, one of the most crucial things to do before retirement is to establish financial goals. This is multi-faceted and involves careful consideration, but taking the time to do this will put you in the best position to support yourself throughout retirement.
Set Retirement Goals and a Savings Target
Anyone can pick a certain age and aspire to retire at that age. However, the timeline for retirement should focus on your savings rather than your age. A key part of the planning process is figuring out your goals and giving yourself a savings target.
The basis for this amount is the lifestyle you imagine for yourself during retirement. Does this involve staying in your home that has no mortgage and planning little travel? Do you see yourself buying a new home that better fits your needs and traveling as much as possible?
Figure out an approximate amount that you’ll need to spend every month or year to support your retirement lifestyle, and build your retirement goals around that number.
Create a Budget and Stick to It
Budgeting helps you make sense of your finances both before and during retirement. Experts recommend making a list of your monthly expenses and setting your budget accordingly. Be sure to account for special occasions that you need to buy gifts for or that require travel expenses.
Following your budget is essential for maintaining your desired standard of living throughout your golden years. If you don’t have a set budget during retirement and spend freely, you may end up in trouble, especially if unexpected issues increase your expenses. For example, a health scare that puts you in a retirement home or dramatic inflation spikes could leave you paying more than you originally planned.
You can estimate your retirement income based on Social Security benefits and other retirement accounts you create and fund, then see how this lines up with your budget.
Consider Investments and Retirement Accounts
Say you have built up a hefty savings account and 401(k) to support you during retirement. You may think that your saved amount will carry you through your remaining years, but what happens if inflation skyrockets and takes a toll on your budget? Experts recommend having additional investments in your name to give you a safety net during economic turmoil.
This may include investing in traditional stocks or bonds, but you can also diversify your portfolio with precious metals. Adding some type of gold, silver, or other precious metal to your assets serves as a helpful fallback for wealth preservation. You can keep physical products in your possession as long as you know how to store them properly or open a precious metals IRA.
A gold IRA is a self-directed IRA that holds valuables, either physical or non-physical gold, in a protected account that a custodian oversees. A gold IRA comes with many of the same rules as a traditional IRA as far as contribution limits but requires a separate gold IRA company to launch and monitor the account instead of a conventional broker. Oxford Gold Group has plenty of resources available if you’re curious about opening a precious metals IRA.
Consult with a Financial Advisor
A certified financial advisor can help you navigate your investments so you can retire when and how you want to. They know the ins and outs of investments and can answer any questions you have as well as guide you through a custom financial strategy that suits your needs. This gives you an advantage since these experts understand how certain actions impact your taxes and will point you in the right direction.
Take Care of Your Estate Planning
It’s difficult to think about, but solidifying your estate while you’re still working is the best way to prepare your loved ones for when you’re gone. Your passing can cause both legal and financial headaches for your family if you don’t take steps to prepare.
Estate planning involves setting up a detailed plan that outlines the distribution of your assets. Putting your final wishes in writing guarantees a smoother process for your loved ones when your time comes.
You should map out a will or trust that features all of your assets — from jewelry and cars to real estate and cash savings — and dictates who should receive each asset upon your death. The estate planning process should also involve creating a healthcare directive and a power of attorney document. These give someone close to you the power to make either medical or financial decisions for you if you are not fit to do so.
Life can change quickly, so having a thorough estate plan in place before retirement can ensure that you’re taking care of your loved ones no matter the circumstances.
Find Different Sources of Retirement Income
Retiring can be a shock when your main source of income disappears. Finding other sources of income is one of the best things to do before retirement because it gives you even more financial freedom when your savings account and benefits don’t suffice. If you want to remain active and don’t mind working during retirement, this is an option, though you can also earn a passive income too.
Consider Supplemental Income Options
Retirees who want to keep themselves busy can choose to take up a part-time job to continue earning a paycheck. This can be a new career path, or some may take their experience and apply it to freelance positions in the same industry they served for years. If this doesn’t appeal to you, consider other opportunities to earn income.
This might include making real estate investments, selling stocks and bonds, or drawing on the equity in your house. Any way that you can earn supplemental income will help strengthen your financial security during your golden years.
Take Care of Social Security Benefits
Social Security is one of the main retirement benefits available to Americans, but the process of collecting it can be confusing. Be sure to start researching your benefit eligibility and collection amount before reaching retirement age. Becoming familiar with how Social Security works and the set amount available to you can help you plan for retirement.
Much of this depends on your age, so look at the potential money you can receive at certain points in your life. Americans can start collecting Social Security at age 62, but a greater amount may be available if they wait until full retirement age to start receiving benefits. The full retirement age is between 66 and 67, though delaying your benefits beyond this point can amount to greater payments each month.
Research the total fixed income you can receive through Social Security and the ideal age at which you wish to start collecting. This will give you a better idea of how much money you’ll have each month and can help you budget accordingly.
Make Amends and Consider Doing Charity Work
If you have outstanding loans or credit card debt, one of the most important things to do before retirement is pay them off. Otherwise, interest rates could keep you in debt. You can make amends on credit card debt by using cash whenever possible, transferring the balance to a card with lower interest rates, and paying off your smallest debts first, then working your way up to larger amounts.
If you want to limit your spending but keep active during retirement, charity work is a great way to stay busy and make a difference in your community. You can volunteer with any number of organizations that pique your interest and enjoy plenty of mental and physical health benefits.
Preparing for retirement takes time, effort, and careful consideration, but the payoff is worth it. As long as you check off these top six things to do before retirement, you’ll be ready to enjoy your time.
Do you want to diversify your portfolio and establish greater long-term wealth? Consider precious metal investments with the help of Oxford Gold Group. We provide resources for investors like you and offer a range of precious metal products, including gold coins and bullion.