Are You Ready For Your First Year Of Retirement?
Are You Ready For Your First Year Of Retirement?
These Are 5 Things You Might Not Expect — But Definitely Need To Prepare For
Amy Legate-Wolfe Thu, May 4, 2023
You prepare for retirement your whole life — maybe as far back as your teenage years and that first check. You put cash aside. You invest. You live within your means and when the time comes, you downsize. So are you really, truly ready to retire? That depends.
Even with decades of planning and saving, surprises are likely to come your way that first year of retirement. Before the unexpected hits, here are five strategies retirees, and those about to take the plunge, need to put in place.
The Adjustment Period
Even if you have a smart plan for retirement, there’s still an adjustment period where leaving the labor force means far less money coming in and more going out. And let’s face it, pre-retirement habits and assumptions can be difficult to change.
If money from government sources and investments represents the upside, then spending habits — with an emphasis on “habits” — are the other. And the two must exist in balance.
Look over your budget before retirement, not after. Where and what do you spend on? What’s your projected cash inflow? Which cuts make sense, especially if they don’t impact your quality of life?
Review everything from subscriptions you stopped using long ago to exorbitant rates for wireless and mobile phone usage. Such moves can bolster your savings cushion when you’re ready to move ahead.
Prioritize Your Expenses
Want to travel? It’s a delicious luxury but it’s incredibly expensive when you factor in food, lodging, flights and frequency of trips. Want to renovate your home or buy a seaside getaway? Interest rates on first and second mortgages these days are through the roof.
Want to stay healthy? Treadmills and gym memberships cost money — though certainly, prevention is a big bargain compared to a lengthy hospital stay.
Before you break open the coffers and live it up, get a sense of your “nice to haves” versus your “need to haves.” If visiting family you miss comes far ahead of a two-week trip to Paris as priorities go, allow your wallet to follow your heart.
Keep Adding To Your Savings
Once it’s time to retire, many folks throw the savings plan out the window of the cruise ship or dream home. That’s the wrong way to go. Saving not only offers a buffer but also a means to make even more aspirations possible.
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https://www.yahoo.com/finance/news/very-first-retirement-5-things-100000477.html