If you are beyond your 60th birthday, it may be time to get ready to retire. There are at least five things you should do before you throw a retirement party.
Consider your financial needs
While there are many factors to consider, generally, you will need about 75% of your pre-retirement income to maintain your current lifestyle in retirement. Additionally, you should create an emergency fund that you will only touch if a costly event occurs, such as a significant home repair or a long-term medical issue.
Think about your estate plan
Go over your estate plan when getting ready to retire. Set up your will and trusts if you still need to do so. Learn how the gift tax law will impact your giving to charities and loved ones. If you plan on leaving assets to loved ones, you may get tax benefits before you retire.
Look at your retirement accounts
If you have individual retirement, Roth or 401[k] accounts, consider how you plan to withdraw money from them. Sometimes, it may make sense to roll all your retirement accounts into one. In most cases, you will have to start withdrawing from these accounts before you turn 72, but many factors may mean you want to take money out sooner.
Plan for Social Security and Medicare
You can get your full benefits from Social Security when you are 67 if you were born after 1960, you can start receiving payments sooner if you desire, but they will be at a reduced amount. You can sign up for Medicare a few months before your 65th birthday.
Retirement can be an exciting change in your life if you take the time to prepare for it properly. Following these four steps is a great place to start.
