Retirement may seem a long way off but in reality it comes sooner than expected. To ensure that you are ready for retirement, there are steps you can take that will help such as creating a monthly budget. This will help determine what you can expect to receive in a retirement income. Write down your expected monthly income, pension, withdrawals from your retirement funds and what you may get from Social Security.
Then, think about rolling over your 401(k). If you have a 401 (k) you have three options when you retire. You can keep it in your employer’s plan, roll it over into an IRA or cash it out. Some say cashing it out is the best option because it will be taxed and be subject to withholding. The next step is to review your investment portfolio. Because you no longer will be receiving your regular income, you will most likely need your investments to help replace some of it. Most financial experts agree that for retirees, its best to take fewer risks with your money. Instead focus more on bonds instead of stocks, which have more risks attached to them.
Another step that is important is to decide when to take Social Security. Keep in mind; you should apply for Social Security benefits three months before you want those benefits to begin. Most importantly, the earliest you can start getting Social Security benefits is at age 62.
For those who are 65 or disabled, you need to ensure that Medicare covers your health care costs once you retire. In addition, even though Medicare covers a great deal of health care costs, it will probably not cover all of your medical expenses in retirement. Additional costs can be covered by a supplemental policy such as Medigap.
To conclude, retirement comes quickly and the best way to prepare for it is to take steps, like above, so that you can transition to retirement. By planning for retirement, you will be ready and able to enjoy it much more!