The prospect of retirement can be exciting, rewarding and sometimes a little scary, especially if you have concerns about your financial readiness. Presumably, it’s a prospect you’ve spent years preparing for. But no matter how diligent you’ve been about saving, if you are planning to retire in five years or so, financial advisors suggest you take the following five steps right now.
- Map Out Your Long-Term Plan – Do you plan to move? Travel? Stay where you are? Rein in your spending or keep it level? How much money will it take to accomplish your plan? If you haven’t done so already, this is the time to meet with a financial expert who can help you calculate how much money you will need to meet your goals over the long term.
- Increase Your Savings – Even if you think you are on track, this is the time to bulk up your savings. Increase the automated amounts you’ve been saving out of every paycheck, socking away as much as you can into retirement accounts, brokerage accounts, savings. Remember, you can never have too much to fall back on.
- Check Your Portfolio – Make sure it’s diversified and aligns with your retirement time expectation. If your risk tolerance is decreasing as you are aging, talk with your financial advisor about making changes.
- Think About Health Insurance – If it expires when you retire, it can be a huge expense, especially if you will be retiring before age 65, the eligibility age for Medicare. Be sure you have a plan for managing health-related expenses.
- Explore Your Non-Financial Choices – Unless you plan to become a dedicated couch potato, you should investigate your lifestyle choices now. Do you want to work part-time? Start a business? Move to a new city? Pick up a sport or a new hobby? Now is the time to explore the possibilities and requirements, so when the day comes to turn in your keys, you can embark on retirement with confidence.
