Retirement is the thing that so many people
look forward to, but it often comes with a fair amount of disappointment or
worry. When retirement is just a few months or years away, you can start
preparing to make the transition easy. Consider aspects that will keep you busy
such as working part-time and other options for keeping a bit of wiggle room in
Increase Cash Reserves
Yes, you can apply for Social Security and
begin pulling out of your 401k plans but that all takes a lot of time. You’ll
want to start building a cash reserve when you prepare for retirement. You can
start pulling out of your money market accounts, and savings account to help
fill the gap between your first pension check and your last paycheck. When setting
yourself up for retirement, be sure that you don’t have a large gap between
money going into your account. It’s not a great way to start retirement, so
it’s best to have about five or six months of expenses set aside.
Define the Lifestyle You Want
Do you want to explore the world, hike up
to Machu Pichu, or sit at home and read? Retirement is about finally living the
way that you want. However, many people worry about having the lifestyle they
want while also staying financially stable. It’s a fine line, but if you put
down some retirement goals, you can work with your budget to make it happen.
When you define your lifestyle for
retirement, make sure you consider aspects past indulging your hobbies. Are you
going to be able to travel regularly to visit family? Do you want to work
part-time or explore options for starting
your own business? Put your goals down on paper and start crunching the
numbers. The question isn’t just how much do you need to retire. It’s how much
do you want to have during retirement.
Explore Your Unconventional Options
Liquifying unnecessary assets, downsizing,
and even selling
off insurance policies. Did you know that you have more retirement options
than just investing in a 401k, bonds, or stocks? If you feel like you don’t
have many options available as you approach retirement, think again.
One of the less explored options for those
who are facing struggles with their health is a viatical settlement. What is a viatical
settlement? People who have a terminal illness and need access to their
life insurance policy can request the sale or settlement of their policy. Many
unconventional options might be available given your specific situation.
Adjust Your Investments
As you age, you can begin adjusting your
investments. While many people will be conservative with their investments
while they’re young, you can afford to diversify your risk as you enter into
your retirement years. You may shift your mist to a 60/40 blend of short term
and long-term investments. Work with a financial advisor to learn about how to
manage risk on short term investments. You don’t want to lose your retirement
funds. But many people want to have more access to their money as they age.