How Retirement Ready Are You?

Retirement is an exciting transition, when you finally have more time to pursue the activities you love. In order to get the most out of this life stage, however, achieving financial security is key.

As you wind down your career, one of the most important goals is to ensure that your assets will last throughout your retirement years. But how can you know whether you’re retirement ready? Here’s a look at what that means, as well as strategies for assessing your preparedness.

What Does It Mean to Be Retirement Ready?

Preparing for retirement requires careful financial planning. In addition to thinking about your own needs, your pre-retirement years are also a good time to ensure that your loved ones know your preferences and will have financial resources to maintain their lifestyle.

Retirement Savings

Chances are, Social Security is only going to address a portion of your financial needs when you no longer have a regular paycheck. That means you’ll probably need to draw on savings each month to live the retirement you’ve always envisioned.

In addition to thinking about the amount of assets you’ll need, it’s also crucial to factor in the type of income you’ll have access to in retirement. Incorporating a source of lifetime income, such as an annuity, into your financial plan can help mitigate the risk of outliving your assets.

Health Care Expenses

Planning for health care expenses in retirement is critical because medical costs—from prescriptions to doctor visits—often increase as you age. Keep in mind that, even if you qualify for Medicare, you may need to pay premiums for supplemental insurance and cover certain out-of-pocket expenses. If you retire before age 65, you’ll likely need to purchase a private insurance policy, which can add a significant amount to your budget.

You should also think about how you and your family will be able to pay for long-term care, whether in your home or at a specialized facility.

Dependent Needs

Being retirement ready also involves protecting the people you love most from life’s what-ifs. Make sure you have an up-to-date will that expresses your wishes should something should happen to you.

You’ll also take comfort in knowing your spouse and children will have the financial resources they need to afford daily expenses and regular costs. Life insurance policies become more expensive as you get older. So now can be a good time to think about your family’s needs and obtain coverage that can help them with final expenses and any outstanding bills.

_____________

Are you retirement ready? Take the quiz to see how prepared you are for life after work

________________

How to Improve Your Retirement Readiness

Taking a few basic steps now can help ensure that you and your family avoid unnecessary stress down the road. As retirement draws closer, here are some of the things you’ll want to consider:

• Develop a preliminary retirement budget. Take into consideration your expected lifestyle and where you plan to live. By understanding your future expenses, you can better evaluate how much you’ll need in savings.
• Confirm your retirement contributions. Regularly review your workplace retirement plan or IRA. As you reach age 50, you can take advantage of the higher contribution limit to reach your target savings amount. A financial professional can help you determine whether you’re on track to have the amount of investments and other assets you’ll need.
• Consider healthcare expenses in retirement. If you’re still working and have a high-deductible health plan, you may want to boost your health savings account (HSA) contributions. These accounts offer tax-free contributions and withdrawals, as long as you use the money for qualified medical expenses.
• Create a plan to manage potential long-term needs. You may want to talk with a financial professional about “self-insuring” through your own savings or purchasing long-term care insurance that can reimburse some of those costs.
• Address scenarios that could affect your family. Unless you’re leaving behind substantial assets, consider getting a life insurance policy that can help loved ones maintain their current financial standing. A guaranteed acceptance life insurance policy can help replace your income without need for medical exams or underwriting.

Ensuring Financial Security During Your Retirement

Preparing for retirement is essential to achieving your desired lifestyle once you leave the workforce. In addition to addressing your own financial needs, creating a safety net for your spouse or children can help bring peace of mind. Talk to a Colonial Penn representative about how you can help support them, regardless of what the future brings.

Colonial Penn is here for you!

Colonial Penn has specialized in making life insurance simple and accessible by offering it directly to consumers since 1957. Click here to learn more.