The full retirement age is defined to be between 65 to 67, based on your year of birth. It may not be the same for every individual, as it also depends on each employer. Deciding when you need to retire can be one of the most difficult decisions to have to ever make. If you retire too late, you may not have enough energy to enjoy it. However, if you retire too early, you may be stuck in a financial predicament. It is best to consult a financial advisor if you are looking to draw up a financial plan that lets you retire comfortably. If you are planning your retirement, here is a retirement checklist that you can refer to, to help you make well-informed decisions.
First and foremost, determine where you stand financially. Evaluate your budget and note down your liabilities, debts, income stream, savings, and insurance policies. Also factor in your vehicles, properties, and other possessions that can impact your bottom line. This can be done effectively when you create a worksheet that can be adjusted as and when you need to. You can easily assess your current financial situation to plan accordingly.
Be sure that you are protected financially before you take any major financial step. If you are just now learning about emergency funds, then it might already be a little too late. If you are, then you need to take this drastic step right away. Create a financial security blanket now to cover you in the event of unforeseen circumstances such as an accident or illness. You can also make use of your emergency funds if there are any delays to the start date of your social security or pension. Some financial experts recommend that you prepare at least three months’ worth of living expenses while there are others who suggest you save enough to spend for at least a year. In case of an emergency, six months’ worth of funds should be enough. Your emergency fund should be based on your monthly expenses and not your income. Keep your emergency fund separate from other savings.
Ideally, we would all like to enter retirement without any debt. As we age, our income is likely to decrease which means that our fixed payments will take up a bigger portion of our expenses. When we are nearing retirement, take a look at our debts. Find out how you can tackle your debts to keep them to a bare minimum before retiring. Regardless of the repayment strategy that you plan to take, it is important to stick to it. Track your progress and ask a friend or family member to keep you accountable.
You need to decide on the type of retirement lifestyle you are looking to lead. Consider the location where you want to live, will you be working, and what will your expenses be like. Try to be as realistic as possible when you are working this out. It may not be possible to determine every single factor right now but you can always refine your ideas as you go along.