Retirement is and has always been a hot topic of discussion. As far as life planning goes it is one of the most important specific aspects to consider.
In fact, information about retirement is everywhere. It is commonly covered on television, online, and paper news. Nearly every financial planner and financial advisor knows their way around it. Most employers have specific sections on their websites that focus on it.
But despite all of the information and the focus on retirement that is out there, successfully transitioning from working full-time can be difficult for any number of reasons. Part of this is that it is a life experience, you can learn a lot about it from other people, but you really have to experience it for yourself to get your own handle on it.
Luckily though, there are several retirement lessons that you can learn while you are still working. They will help you plan for your retirement and make the transition all the easier.
1. Think About Your Body
When you retire it’s not just you that is retiring it is also your body. What I mean by this is that because of being older different parts of your body won’t be working as well as they used to when you enter retirement.
In fact, Medicare doesn’t cover as many costs as most new retirees expect, especially involving key senses. A few major areas that retirees have medical problems with that are also brutally expensive include:
- Hearing loss
- Vision loss
- Tooth decay and other dental problems
Simply put, you almost can’t afford to have additional insurance when entering retirement. Because problems like these are so common, and are reoccurring (not one-time) expenses, it is essential that you plan for them so that you can keep a high quality of living throughout your retired years.
2. Part-Time Work Isn’t Always Your Best Bet
Many people nearing retirement plan on working part-time when the day comes, at least at first. This has long been a strategy used to make a little extra money and maintain an active social life.
However, part-time work can seem like a good idea but it can be a much different story once you jump on board. For one thing, work is scarce and part-time work often comes in the form of jobs that are much more difficult and tiring than the one that you retired from. They often pay less too.
If you have planning on working part-time during retirement, don’t save finding a job until you have to. Work hard to line something up that you are happy and comfortable with and that won’t put too much of a strain on your body.
3. Line Up Your Family Plans and Retirement Plans
One of the greatest parts about retiring is having more time for your family, especially grandchildren. But spending time with family can cost more money than you might first think.
Too many new retirees realize that they didn’t consider their family plans along with their retirement plans closely enough. An example of this is holding onto extra living space to host family events. Of course this is a nice thought but the extra space can seriously eat up money because of taxes, utilities, and maintenance.
4. Beware of Taxes and Penalties
Another retirement lesson that you can learn while you are still working is to beware of taxes and penalties associated with your retirement account.
Quite a few new retirees have no strategy involving withdrawal of their savings and are often tacked with the above mentioned taxes and penalties. Many of these penalties have to do with your age and the age in which you can take out money without penalties.
Another common retirement mistakes that often results in penalties is withdrawing a large amount of money from your retirement savings to pay off a large debt. Examples of these large debts include mortgages and home equity loans. This is a mistake because withdrawing this much money at one time requires that you pay taxes on the money like you just earned it.
Retirement is a very exciting time in a person’s live. But you don’t want to jump head long into it without doing your homework first. Your best bet is to learn as much about it as possible and learn as many retirement lessons as you can while you’re still working.
Understand the ins and outs of retirement is essential. Planning for every step your retirement, understanding your retirement savings account, and communicating with a financial advisor are all surefire ways to protect yourself. Do these things and you’ll more than likely be in the clear.