Retirees greet each other at a Saturday night dance in Sun City

Four ways you can prepare for retirement

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 your budget.

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.

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