All the preparations from the last 20 or 30 years have been for this point in your life. Now you are within a few years of the finish line. Are you ready? Here are five different suggestions to think through to help ensure your retirement is the best it can be.
Understand the Requirements of Your Different Accounts
You have spent these many years investing into your retirement accounts, but now is the time to start thinking about how you are going to withdraw the money. There are certain guidelines set up to how you actually use this money. Here are a few rules to look into for your specific accounts.
- What is your required minimum distribution for the account? This is the minimum amount you must withdraw from your account each year.
- At what age do you need to start withdrawing money from the account? The typical age to start withdrawing is 70 ½.
- Will your withdrawals be included in your taxable income? If so, are they ways to withdraw the amount without being taxed so heavily?
These questions can greatly influence your finances, so make sure you are informed on your specific accounts.
Search for Opportunities to Reinvest Money
Depending on the amount you are required to withdraw each year, you might look into different ways to reinvest the money. You might not need to live on that money and it could be better put to use in an investment like real estate or different stocks and bonds. After all, you could have 30 years left of living after retirement. Have your money work for you throughout retirement as well.
Also, take a look at your current situation and see if downsizing is an option you want to look into. If all your kids are raised and gone, a smaller house might free up some extra money and be easier to maintain. If you have more than one car, see if those cars are a necessity. If not, downsize to one car.
Take a Vacation You Wouldn’t Have 20 Years Ago
Now that retirement is in the near future, take the time to plan something fun to do to celebrate. Use some of that money you have been scrimping and saving all these years to celebrate. Be wise when you are deciding where to go. You have many years of living ahead of you. Enjoy a great trip or adventure without spending all your money in the process.
Look Into Your Various Insurance Policies
Those policies you have been paying into for all these years could actually be used in the next few years for one reason or another. Make sure each policies is current. If something were to happen to you and your long term insurance or disability insurance had lapsed, the cost would most likely fall to your children. Don’t leave them with that expense as they are starting out at the beginning of their own financial journey. Take the time to check with all your different insurance policies to ensure they are current and have the coverage you think they should.
Avoid Out of Control Spending
Be aware of your spending the first years of retirement. You have a good 15 to 30 years ahead of you, depending on when you retired and how long you live. To make the most of these years, don’t over spend in the first few years.
If necessary for financial reasons or for something to do, consider the option of picking up a part time job. This could be fulfilling a dream you have had for years, or just a job to give you something to do and someplace to be a few days a week. Plus, the money will allow you to enjoy flexibility in spending a little more.
Enjoy This Time of Life
All the hard work of saving your money is starting to finally pay off. Now you can enjoy the money you have spent all the years working to save. Don’t be afraid to enjoy retirement to the fullest. Remember, be wise with your spending habits and make sure you have taken the correct measures to make the most of your retirement years.