The Ultimate Retirement Fund Checklist

Are you thinking about retiring? Here’s a rundown of things to keep in check to prepare your finances for your much-earned retirement.

Put together your rainy day fund

Even prior to retirement, it has always been a rule of thumb to save at least three months of your paycheck as your emergency fund. Whether it’s to prepare for unexpected expenses or eventually for delays in pension, it is always best to be prepared for unforeseen events.

Budget your retirement plan 

Things will change when you eventually stop working, and so will your expenses. To be prepared, evaluate what you spend on now and try to predict as accurately as you can on what will happen after retiring. Remember that overestimating costs is always better than underestimating them.

Choose the best Health Insurance fit for you

Don’t forget a very important aspect of retiring – your health. Medical expenses may be costly, especially if you plan on retiring early, but it really pays to include this as a big chunk on your retirement budget. When working this out, keep in mind that your health insurance will only cover around 50% of your total healthcare needs.

Educate yourself on Retirement Income Tax

Did you know that retirement income is also taxed? Don’t forget to factor this into your budget. Know what to expect, and more or less, how much and when you will be taxed. This is something most retirees overlook, so better be vigilant, or you’ll be in for an unpleasant surprise!

Create a timeline

Like any good financial management, it is always a good idea to create a timeline for your expenses. Create a list of when your income comes in, where they will be coming from, and where they will be spent on. This will help you a great deal with your finances and will enable you to control your cash flow.

Explore retirement calculators online

Familiarize yourself with different online retirement calculators. There are tons of them, and though they’re not always super accurate, they’ll give you a pretty good estimate of effects of your potential choices regarding when you’ll retire and the rate of return and inflation. Exploring these will give you a good picture of how your income will be affected.

Create an investment plan

Just like a job description, an investment plan will be easier to choose once you know what you need, like hiring the perfect applicant. Following an investment plan during retirement is beneficial because it makes you more meticulous with your finances.

Read your favorite retirement planning book

Please read at least one book about retiring! You will need to know the basics to ensure a successful retirement. A lot of people will have a lot of things to say, with varied opinions, but remember that your money will need to last for a while, so it’s safe to get informed through a trusted source.

Look out for retirement planners

Retiring involves a lot of hefty choices, and it always pays to hear out a second opinion, especially from someone qualified. Financial advisors who specialize in retirement planning are around and may be able to help you with either planning and reviewing your retirement plan or managing your investments for you.

Check with a Social Security calculator prior to claiming benefits

Before you claim your benefits, talk to a financial advisor first to receive advice that’s tailor-fit to your needs to maximize your income. What’s easier is now, you can use an online Social Security calculator too, and you can explore different ways to get more advantages from your Social Security.

Educate yourself on retirement investment options

Every investment decision that you will create will have its own set of advantages and disadvantages. Of course, to know which option is best for you, familiarize yourself with as many plans as you can so as to maximize income. Know how these tools operate and decide for yourself.

Analyze different pension distributor options before sticking to one

Canvas your pension distributors well. Remember that the choices you make regarding pension are binding and irreversible, so make sure you are making the right ones. Analyze your options first before agreeing to the first distributor you come across with.

Educate yourself on getting your 401(k) plan

Depending on your age, you should know if your money should stay in your 401(k) plan or be transferred to an IRA account. Generally, if you are over 59 and a half years old, the better option would probably be to merge your accounts.

Consider employment’s impact your social security benefits

Some people plan on working even during retirement, but keep in mind that earning an income while starting benefits before 66 may impact your social security. If you earn more than enough at this time, you may end up having to give back Social Security benefits anyway.

Study Medicare 

Medicare starts at age 65, but there are other things that may be noteworthy to know before you get to that age. Just like any other health insurance, it’s best to understand your Medicare benefits, including Medicare Part B premiums and what they entail.

Based on materials from The Balance

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