The new year often comes with new goals. Maybe your goal is to retire this year, but you're struggling to feel 'ready'. Whether you've been counting down the days or this decision has crept up on you, it's essential to approach this life transition with careful consideration and planning.
In this blog, we'll go over three things you need to do if you're retiring in 2024 to ensure a smooth transition into this new chapter of your life.
Assess Your Finances
One of the most critical aspects of retirement planning is to perform a thorough assessment of your financial situation. As you prepare to leave the workforce and drastically change your income streams, you need to clearly understand your sources of retirement income and what necessary and unnecessary expenses you’ll have.
Here are some key steps to take:
- Calculate Your Retirement Income: Determine your sources of retirement income, such as pensions, Social Security, and any other investments or savings. Understanding where your funds are coming from and how much is crucial for budgeting.
- Evaluate Your Expenses: Review your current and anticipated expenses in retirement. Consider healthcare costs, leisure activities, and potential travel plans; remember, your health needs will likely change throughout your retirement, too. This will help you establish a realistic budget for your retirement years.
- Adjust Your Investment Portfolio: As you transition from a saving to a spending phase, consider adjusting your investment portfolio to align with your risk tolerance and income needs. Consult with a financial advisor to ensure your investments are in line with your retirement goals.
Plan for Healthcare
Healthcare becomes an increasingly important consideration as individuals enter retirement. Take the following steps to ensure you have a comprehensive healthcare plan in place:
- Review Medicare Options: Understand the different parts of Medicare, and enroll in the appropriate plans to cover your healthcare needs. Consider supplemental insurance to bridge coverage gaps and protect against high out-of-pocket expenses.
- Consider Long-Term Care Needs: Evaluate your potential need for long-term care and explore options such as long-term care insurance. Planning for these expenses in advance can prevent financial strain in the event of health challenges.
- Maintain A Healthy Lifestyle: Prioritize your health by maintaining a healthy lifestyle. Regular exercise, a balanced diet, and preventive healthcare measures can contribute to a fulfilling and active retirement.
Picture Your Retirement Lifestyle
Retirement is not just about leaving work; it's an opportunity to create a fulfilling and purposeful lifestyle that wasn’t as feasible while you were working full-time. Consider the following ways to define and shape your lifestyle during your retirement years:
- Set Personal Goals: Identify personal goals and aspirations for your retirement. Whether you want to pursue a hobby, travel, or spend more time with loved ones, having clear ideas of what you want to do can provide direction and purpose.
- Stay Social: During your working years, a lot of your socialization comes from your job—this can make retirement feel isolating for some. Just remember, you’ll have more time to join clubs, engage in community activities, and spend more time with friends and family.
- Create a Routine: Establishing a routine in retirement can provide structure and a sense of normalcy. Whether it's volunteering, taking classes, or spending dedicated time on hobbies, having a schedule can help you avoid listlessness in retirement.
If you’re struggling to picture your retirement, you’re not alone. Retirement is a significant life change that requires a lot of mindset shifts.
One way you can get a clear picture of your retirement and prepare to get there in 2024 is to contact a financial professional, like our team at Totus. We’ve helped hundreds of people retire comfortably with our unique and holistic retirement strategies. Learn more about our retirement planning services on our website.