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Financial Advice for Those About to Retire
Regardless of whether you are an early retiree or a full-term retiree, when you are about to retire you have some critical decisions to make. If you have been planning for retirement for a considerable period of time it is highly likely that you will have a nest egg, and you will also have several investment strategies aimed at meeting your post-employment expenses.
Most retirement planning should begin about five years out from your actual “final” day in the office. The real crunch begins about one year from that day and includes a number of final arrangements. These are the decisions that make the transition from working to retirement smooth and easy. Most of that final year is going to be dedicated to paperwork, arrangements and planning for the remainder of your life. About three years before retirement is when an individual can make some solid financial decisions that will determine their comfort level post-retirement.
At least three years before retiring you should create a very detailed budget to ensure that all of your plans have met their established goals. This is the time to discover if you are going to need a part-time income to supplement your financial arrangements and not a few months into retirement, or it can help you to see that you should postpone retirement for a few more years in order to meet some essential goals or numbers. If you need assistance with this, you always have the option of visiting a financial advisor.
This too is the time to develop a clear cut strategy for accessing your retirement accounts. This “income stream” will come from many sources; most retirees have approximately nine income sources from which they must juggle their monthly income. With this many areas it is easy to make some miscalculations and three years out is the best time to ensure that your plans will be able to work for you. This strategy should look at the exact amounts required from each revenue stream or source on a monthly basis and details the plans for getting that money without penalties or with the minimum amount of taxation. You should look to tap no resource at more than four percent of its value on an annual basis, if this is going to occur you should dedicate time to assessing alternatives, such as annuities.
Finally, consider health care. This could be a huge expense during retirement and it should be included in all plans. There are long-term care insurance policies that will protect all investments and assets should you require significant medical care at any point in your retirement years.