3 Important Things to Do When You Are Preparing for Retirement

retirement

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After working for some forty years of our lives, we finally reach the time when we can start to think about leaving the daily grind of the workweek behind. The looming change from doing the 9 to 5 each day to having lots of time on our hands is just one of the major shifts that comes with stepping into retirement. In a way, retiring marks a major passage in our lives. Much of our identity, our social network and our daily rhythm is tied up in the work we do each day.

When we retire, our life will be very different from when we were part of the working world. The constant flow of cash from our steady paycheck will be gone, and we will have to rely on income from social security, our pensions and 401Ks and our investments. Retirement also coincides with other changes we may be going through, like seeing our kids now established and on their own. As your retirement date approaches, there is a lot you need to think about and three important things you need to do.

Where Possible, Pay Off Your Existing Debt

As we move into retirement, we typically see a reduction in how much money is coming in each month. If you are like many people, you probably have outstanding credit card debt. You may even have a car loan you are still paying on, and possibly even a consumer financing loan too.

It’s important that you put together a plan, at least a couple of years before retirement, to pay off all the existing debt that you can. You will be able to adjust to the reality of your reduced retirement income much better if you don’t have credit card and other loan payments weighing you down.

Review Your Future Health Insurance Options

As we get older, we all have to be concerned with medical care and making sure we are fully covered by our health insurance plans. When we are working, it’s likely that our health insurance options were fairly good and were offered as part of our employment. Now, as retirement looms, we’ll need to look at new insurance options,

Once you turn 65, you will now be eligible for coverage by Medicare. There are important decisions to make, so you will want to be sure to get all of the detailed Medicare information you need. It’s a good idea to work with a trusted insurance agent who can help you evaluate whether to choose basic Medicare, a Medicare Supplement plan or Medicare Advantage.

Think About Downsizing

When we were raising our family and the kids were still at home, it made a lot of sense to have a larger home. As retirement approaches it may be the perfect time to evaluate where, and how, you now want to live.

If you find yourself with an empty nest, it could be the perfect time to downsize. Moving to a smaller place to live could dramatically reduce how much you spend each month on housing. In addition, with a smaller home and perhaps fewer belongings, you’ll spend a lot less time each week cleaning and maintaining your home.

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