Retirement is not an ending, it’s a continuation of living, a commencement to the next phase of your life.
In this regard, it’s just like graduating from high school. Being retired is how your going to spend a good portion of your life and it deserves a plan.
The number one thing retirees worry about is outliving their retirement savings. Many will look for options to increase their savings or their income after the retirement ceremony is over.
Money is important when you’re thinking about retirement. Your income will probably decrease significantly when you don’t have a paycheck coming in week after week. But you still have bills to pay and things that you want to do that require money.
When you begin to plan for your retirement, ask yourself the following questions:
-
- Do you have a pension or retirement plan at your place of employment and are you eligible? Some companies don’t offer retirement or pension plans and some jobs within companies are not eligible for these plans even if they are offered.
- If you have participated in an employer sponsored savings plan, how much will your pension or retirement plan be worth when you retire? This information is necessary so you can decide if you need to make additional savings such as an IRA to supplement your retirement benefits when you decide to retire.
- What happens to your employer provided retirement plan if you change jobs? Your employer can tell you if your retirement plan can be rolled over into an IRA, cashed in, or left with the company if you should leave the company. You will need to decide which is best for you to do.
- If you retire early, what happens to your retirement plan with your employer? Your employer can tell you when you are vested with the company and what you can expect to receive in the way of retirement benefits when you decide to retire.
- Will your retirement benefits be reduced by Social Security? In some instances, your retirement benefit could be reduced by the amount of Social Security you draw. Discuss this with your employer to see if this happens with your pension.
Look at where your finances are right now. Gather all your financial information into one place and go over it to see what you have and what you need. Look at your benefit plans, social security, veteran’s benefits, and so on. Make a detailed list of your assets, such as real estate and investments. Next list all your liabilities, such as debts, loans, child support, and alimony.
Retirement planning gives you the opportunity to look into the future and make your best guess about how much money you’ll need to live a comfortable and satisfying life.