Many Americans begin considering retirement as they enter their 60s, but not everyone is truly ready to stop working by 63, the average retirement age according to the United States Census Bureau. There’s a lot to consider, including assets, debt, retirement needs, and estate plans. This checklist should help those entering retirement age decide if the time is right.
Assess All Assets
The first thing prospective retirees should do is figure out where they stand financially. A good way to start is by taking stock of all financial assets and liabilities, including income streams, savings, debts, and insurance policies. Determining whether it’s the right time to retire will be much easier once a clear, honest financial inventory is established. And since income will be lower during retirement, it’s ideal to stop working with as little debt as possible. Those preparing to retire should try to pay down their loans and mortgages.
Put Together an Emergency Fund
It’s always wise to prepare for the unexpected. Preparing an emergency fund for a medical or property-related catastrophe should be part of anyone’s retirement plan. While experts recommend setting aside up to a year’s worth of living expenses as an emergency fund, around six months’ worth should be sufficient. Emergency funds should be kept separate from other savings so that it’s less tempting to spend the money unnecessarily.
Determine Retirement Needs
No two retirees will have the same lifestyle. Some continue working in a part-time job, while others want to spend more of their hard-earned money on home upgrades or vacations. No matter what a person’s retirement goals are, they should have a realistic idea of what kinds of expenses and possible incomes will be part of the retirement equation.
Do Some Estate Planning
No one wants to start thinking about estate planning, but retirement is a great time to decide on how affairs and financial matters will be handled end-of-life. It’s better to have a plan in place than to saddle family members with confusion and financial burdens down the road. Looking at it positively, once everything has been settled and notarized, retirement will be much less stressful, as many important decisions will have already been finalized.
As you begin checking off your retirement checklist, the attorneys at Doran Sims Wolfe Ciocchetti & Yoon can assist you with estate planning services for you and your loved ones. We have over 40 years of experience assisting clients with estate planning, family law, personal injury cases, and more. To schedule a free consultation, contact us online or call (386) 868-2157 today.