When you are retired, the hope is that you will have more time to devote to your interests and hobbies. If you've always wanted to live closer to family, near the ocean, in the mountains, or within a major city, retirement may be the perfect time to realize those dreams. Keep the following list in mind when you near retirement to set yourself and your family up for success!
Your budget may need updating. Creating a new budget for your retirement income and expenses can give you confidence that you will be able to cover all the bills and have a little fun. In retirement, rather than receiving a single paycheck from your workplace each month, you will likely be dealing with several sources of income. You also may need to decide how much money to withdraw from retirement accounts based on expenses. If you are not yet retired, it is a good idea to test out your new budget for a few months before retirement to see what needs tweaking.
Your legal documents may need updating. When was the last time you updated your will or estate plan, executor information, and beneficiaries? Life circumstances and relationships change which often means your legal documents will need an update.
Staying healthy will help you enjoy retirement more. Yes, retirement is a time to take it easy, but that doesn’t mean you should let your health decline by being inactive. Continuing to be active and taking the time to prepare nutritious food in retirement can improve energy, physical strength, balance, and sleep. For your mental health, be sure you aren’t isolating yourself too much in retirement. Stay in touch with friends and family or make new friends by engaging in new hobbies.
Downsizing during retirement may be the right decision for you. One way to reduce retirement expenses is to downsize from a larger home to a smaller home in the same area or in a completely different region or state. With a smaller home, there will be fewer maintenance costs, the utility bills will be lower, and you will pay less in property taxes. The goal of downsizing could also be to reduce the time you spend maintaining your home, giving you more time to travel. Another reason to downsize is to find a home that better fits your needs as you age. It may be more cost-effective to move to a senior-friendly home rather than try to modify your current home.
Senior discounts apply to more than just meals at restaurants and travel expenses. You can find senior discounts on cell phone plans, prescription services, and at retail stores. Did you know you also get a senior discount on your taxes? It never hurts to ask. Starting the year you turn 65, you can qualify for a larger standard deduction when filing your federal income tax return. Another tax break comes in the form of your HSA plan. You usually have to pay taxes and a 20 percent penalty if you withdraw HSA money for anything other than qualified medical expenses, but the penalty goes away at 65. At that point, you only have to pay taxes on nonmedical withdrawals.
Most importantly, enjoy every minute of your retirement! Reflect on the highs and lows of your working years and enjoy every moment of your life to the fullest.
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