You probably spend time doing some research before taking off on a road trip —planning the best route, identifying stops along the way, and estimating costs and mileage. The road to retirement is a significant journey in life, but it’s easy to overlook the planning aspect. As you set out on your retirement journey, here are some steps to take at each stop along the road.
20 or More Years to Retirement
Visualize your retirement. Think about your goals for the future and where you see yourself spending your retirement years. Use this as motivation to start planning and ramping up your retirement savings.
Make saving a habit. Start automatically deducting money from your paycheck to go into your employer-sponsored retirement account. Or open an IRA and set up recurring contributions to building your retirement savings.
Meet with a wealth management advisor. A wealth management advisor can help you determine your goals for retirement and estimate how much you need to save to achieve them.
5 to 10 Years
Estimate your income needs. Once you have an idea of the retirement lifestyle you want, you can estimate how much retirement income you’ll need to support it. Talk with a financial professional to run the numbers and compare options, ensuring your plan aligns with your goals and desires for retirement.
Keep saving. As you near retirement, focus on building your retirement savings and making sure your spending is in line with your future goals.
3 to 5 Years
Review your retirement benefits. Be sure you understand how your benefits will work in retirement, including Social Security, pension plans, and other retirement plans. If you have questions, ask your employer or contact the U.S. Social Security Administration (www.ssa.gov) for questions about Social Security benefits.
Assess future healthcare needs. Seek out information about Medicare and any employer-sponsored health benefits that will be a part of your retirement. Consider options to help pay for care needs as you age.
1 to 3 Years
Calculate Social Security benefits. Compare the benefit amounts you would receive by taking Social Security benefits early at age 62 or at full retirement age (age 66 or 67, depending on when you were born). For every year you delay taking Social Security (up to age 70), you’ll receive a larger monthly benefit.
Make a budget. Once you understand your benefits and have determined your retirement lifestyle, craft a budget to be sure the lifestyle is achievable. Ensure this budget and planning allows for unknowns and changes in your investments and health.
Consider adjusting your asset allocation. As you near retirement, you may wish to reallocate some of your assets into lower-risk investments. Work with a financial professional to evaluate the effect this may have on your retirement income.
Less than 1 Year
Consolidate and automate accounts. You will likely have multiple income sources in retirement. Set up automation of as many as possible such as automatically depositing Social Security payments. Consider using automatic bill payment for expenses.
Transition your healthcare coverage. Begin activating any retiree health benefits your employer provides. Check your Medicare eligibility and apply for coverage three months before you turn 65.
Set up your Social Security payments. If you decide to start taking Social Security, contact the U.S. Social Security Administration to receive the necessary paperwork to file for payments.
Plan your retirement income stream. Ensure that your withdrawal strategy is finalized and you have enough income drawn from your assets each month to cover your expenses.
Explore living options. Depending on your retirement goals, be sure to evaluate all your options to make those dreams a reality. It may be best to downsize from your large home, or if you wish to travel, you may appreciate the added security and conveniences an active adult community or retirement community can provide.
Helping You Navigate
Amegy can help you make the transition to retirement a smooth one. Creating a resilient retirement plan can help you overcome financial setbacks in life without derailing your plans for retirement. Contact your Amegy banker to learn more about wealth management services designed to help you build a secure retirement future.