What Should I Do 6 Months Before Retirement?

Huynh NguyenOctober 19, 2022

What Should I Do 6 Months Before Retirement?

Deciding to retire? These last few months leading up to your retirement are very important. Of course, you are involved in finishing work and want to give your best before you retire, so you might find yourself working extra hard for your satisfaction to end your career on a high note, but you also need to consider making plans to have a secure retired life, Free from all your financial tensions.

You need a secure source of income and a reliable health plan before you can finally switch off from work mode and enter your free retired life.

Now, what is it that you need to take care of before you can retire? Here is a complete list that you can check before you go through this major transition in your life.

Establish a retirement budget

During your adult life, you worked hard and every month got a salary as a reward for the work you’ve done, but after retiring, you may want to ensure that you have a monthly income from other sources that can help you enjoy the standard of living that you were enjoying before.

Your employer may have provided you with an insurance plan and a pension plan. You may have also saved during this time in an individual retirement account or through life insurance.

However, if you’re confused and don’t know if you’ve saved enough or not, you can use a retirement planning calculator so that you know how much funds you would need to save before retiring. There are many ways you can save up for retirement and make sure you have enough money to support yourself.

Get a complete picture:

It is six months before your official retirement; you’ve worked hard and saved up money in your accounts in the form of funds or insurance. Revise your retirement and plan and look if you’ve saved up enough to finance the type of standard of living you’ve envisioned for yourself. If you feel like you may not have enough, consider downsizing or, in the last months, invest in a new business to start a new stream of income.

Retirement income:

You can expect a delay between your last paycheck and when you can start receiving your retirement income. At this time, you may have enough savings in your savings account or your emergency fund to sustain you through this time.

Sources of income:

You need not worry about your after-retirement income if you have invested mindfully into a guaranteed income plan; this may include annuities. Annuities are a series of payments, such as into a savings account or insurance payments, that may reap benefits at a later date when you need them.

Retirees benefit from these a lot, especially fixed annuities that are less risky, and you get a fixed percentage each month, so they are more of the certain types of income. However, if you can take risks, variable annuities might be just for you, as if market conditions are as planned, they can lead to profits on top of monthly income.

Benefits:

Another thing you need to keep in mind while analyzing your retirement future is that you might get benefits or pensions set by the government. This may vary depending on your age; for example, those who retire early, around the age of 62, might face a reduction of 30% in the amount of benefit they receive.

Therefore you need to do the math about various sources of income and compare it to your calculations. Moreover, you need to take care of any debt or future payments that you might need to pay; you can also hire a financial advisor to plan a financial strategy best suited for you.

Take the necessary measures

Before retiring, get some legal help, and hire a lawyer to draft up your estate plan. Since you’ll be getting older and life can become more unpredictable, drafting up your estate plan will mean that you’ll know exactly how you’re going to distribute your estate.

An estate plan will include all the details in case of any emergency during your life you want to do with your estate, and it also includes your will. You can give healthcare power of attorney to a trusted person to make sure that if something happens to you, such as any terminal illness, that person will make the right decision about your health and any treatments you might need to undergo.

Moreover, if you own a business, you may give someone the financial powers of attorney; they act on your behalf to make financial decisions for your business. An estate plan also involves your will, in which you can name your heirs who are going to inherit your property, bank accounts, etc.

You can also appoint a liquidator. It is a person named in a will to settle an estate. They will look after matters such as paying your debts and taxes, blocking credit cards, canceling subscriptions, closing bank accounts, and making sure the property is distributed according to your wishes.

This part is important for a variety of reasons, firstly, you’re getting old, and you need to start planning how you want your estate distributed to avoid any kind of inconvenience or your estate ending up in the wrong hands.

This process should be done as soon as possible; anyone of sound mind needs to decide before retiring so that you don’t have to worry about it once you retire and have to go through the tiring process of getting a long list of documents made.

Consult a financial advisor

Suppose you’re having trouble with various aspects of your retirement and do not understand the process. No need to worry, as you can consult an advisor anytime you feel the need to; they’ll help you plan and strategize your next step. The process might be new and overwhelming, but with a bit of help, you can be just on the right track!

Financial advisors will prepare your savings withdrawal strategy; they will invest in a guaranteed investment fund like an annuity and find the right insurance for you. You might want to consult your employer as well.

Therefore, Six months before the time of your retirement, you need to be serious and look into all your financial income, will, and estate plans, and consult a financial advisor. It might feel a bit overwhelming at first, but as soon as you get it out of your way, you can spend your time enjoying the extra time you have on your hands during retirement.

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