Retirement
Preparation Guide
You’ve put in the time
and the hard work. You’ve made the right financial decisions and made the right
investments. Everything is sorted out, but there’s still some underlying
anxiety that you’re doing something wrong or that you haven’t “prepared” enough.
Here are some essential tips for preparing for retirement.
1.
Prepare
Your House. If you’re planning on downsizing after
retiring you should start preparing your house for sale now. Start by fixing
any damaged roofs, redecorating your house, and clean everything. If you intend
on staying in your house this a good time to do repairs to ensure that the
house will be taken care of for the next 20-30 years.
2. Adjust Your Budget Now. A
common mistake people make when entering retirement is not adjusting their
spending habits beforehand. Pre-retirement is a good time to reevaluate your
monthly and annual expenses. Even though
initially it might be difficult to adjust your spending habits it will help
make the transition into retirement easier. Try cutting down on less essential
spending first. Take it slow and figure out what’s necessary spending and
what’s not. This spending adjustment can also be viewed as a “litmus test” to
see if the amount allotted to you during retirement will be suitable for you.
If you find that you can't work with this kind of budget, it will give you time
to pivot and decide to hold off on retirement.
3. Work with A Financial Advisor. You
might feel apprehensive to work with a financial advisor because you haven’t
before. Or you might feel so confident in your ability to plan for your
retirement you might find it unnecessary to seek help. That is understandable,
but still, it would not hurt to meet with a financial advisor who’s entirely
equipped to help you with your retirement plan. Meeting with a financial
advisor will give you the option to work through all your options with someone
who’s incredibly qualified. They could help you set up an annuity plan, manage
your retirement budget, and look at your entire financial situation. Even if
you feel that you have checked every box in your retirement plan, it’s an
excellent idea to not only get a second opinion but to improve your plan
potentially.
4. Consider Long-Term Care Insurance. Preparing
for retirement also entails preparing for everything. By getting Long-Term Care
Insurance, you curb the expenses you would incur by needing a nursing home or
other long term-term care in the future. Long-term care insurance is coverage
that provides nursing-home care, home health care, and adult day care for
individuals above the age of 65 with a chronic or disabling condition that
needs constant supervision.[1] Long Term Care insurance
offers more flexibility and options than many public assistance programs. Another benefit is that premiums paid on
Long-Term Care Insurance are usually tax deductible.
5.
Get
an Annuity. Here’s a quick crash course on how
annuity’s work. They are essentially a financial product that provides you with
a fixed income once you retire. You pay a lump sum, and then you receive a
fixed income during the duration of the annuity. There are many variations and
permutations of annuity’s, but I would strongly recommend getting an FIA (fixed
indexed annuity). A key advantage of going with an FIA is that it provides you
with economic safety. With an FIA your principal will always be protected. Even
if an economic crisis were to arise your principal will still be protected.
FIA’s are also perfect for people looking for a risk-averse annuity option with
room for financial growth. FIA’s will give you more potential growth than a fixed
annuity and less risk than a variable annuity.[2] FIA’s are in the
“Goldilocks zone” of annuities. Not too risky and not too safe.
[1] “Long-Term
Care (LTC) Insurance” Investopedia.com. https://www.investopedia.com/terms/l/ltcinsurance.asp
[2] “Fixed
Indexed Annuities Defined” AnnuityFYI.com. https://www.annuityfyi.com/fixed-indexed-annuities/what-is-fixed-indexed/
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