Knowing when to finally retire and just enjoy your life can be quite challenging and confusing. While others aim to retire at a specific age, some hope to save a particular amount of money for it.
However, there is more to retirement than merely being an arbitrary number. Retirement is a major transition in life that you need to prepare for years.
Whether you are nearing your retirement date or just want to be fully prepared for this critical stage of your life, here is the 8-point checklist of things you should do before retirement to ensure that you don’t forget or miss anything.
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Build Your Emergency Fund
Before pulling the trigger on your retirement, see to it that you got some money set aside for rainy days, including medical expenses, car repairs, a new roof, or other unexpected needs. Your emergency fund should be kept in a different savings account. This way, you won’t feel any temptation to spend it on other things. Financial experts suggest saving 3 to 6 months’ worth of your income.
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Create a Diverse Portfolio
Diversifying your portfolio means having different investments such as bonds, stocks, and real estate in various industries. Together with making quality and reliable investments, this will help ensure that your current portfolio won’t experience wild fluctuations and at the same time, offer a reliable and solid income stream.
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Envision Your Own Retirement
Retirement is never a one-size-fits-all thing. Be sure to envision what and how you wish your retirement to look like, from your lifestyle to your place of residence, your expenses, how you plan to spend your time, and more.
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Determine When to Withdraw Your Funds
Since there are regulations and rules in terms of when you can and must withdraw from your retirement funds, you might want to consider working with the specific institution managing your funds. Take note that you will get more if you also wait longer.
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Lower Your Debt
If your current debt is low, you are off to a great start. But if it is higher than how much you’d want it to be, you might need to work a bit longer. Try to pay at least the minimum payment for your debts every month.
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Have an Estate Plan in Place
Regardless of your total wealth, it is always a good idea to head into retirement with an estate plan in place. This will ensure the distribution of your assets according to your preferences and wishes. Your estate plan must include a power of attorney, a trust, and a will.
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Give Room for Fun Stuff
Most retirees end up missing the socialization and structured schedule that their job provided. Don’t hesitate to come up with some interests and hobbies to keep you inspired and busy throughout your retirement.
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Make an Asset Inventory
All the tips above will not be possible if you have no idea where you really stand in terms of finances. List down your stocks, source of income, insurance policy, and savings balance.
Consider other assets you have such as vehicles, properties, jewelry, antiques, and other valuable possessions. Don’t forget to add all your assets and then deduct your debts from them to determine your current financial standing.
Once you have ticked off all these, you can finally say that you are ready to retire!
These are the thing to do before retirement. Read about Covin-19 scams.