Finances

Envision Your Retirement Life 

There are a million articles out there in cyberland to provide you with much needed information on how to retire without stress, and I am sure you have heard of the smartest man in personal finance, Dave Ramsey. If not you should look him up online. He has some common sense tips on managing money for people of all ages. What if you are still lost and don’t have a clue of how to proceed? Or, What if the advice you were getting isn’t pertainable to you?  What if you chose to enjoy a few too many vacations in your younger years and didn’t happen to save enough?  As I near retirement, I am finding that retirement advice is not one size fits all!  

People retire at different ages for a variety of reasons. No one can tell another person when they should retire. It is something you have to determine for yourself. You will know if and when the time is right. According to an article on NerdWallet.com The average retirement age is 62 https://www.nerdwallet.com/article/investing/social-security/average-retirement-age-us. However, it is noted that the longer you wait to tap into Social Security, the more your monthly checks will be. 

There are advantages and disadvantages to retiring early. The biggest advantage is the free time you will have to pursue other interests while you are still young enough and healthy enough to enjoy them. The disadvantage, you will probably have less savings, and less monthly income throughout your retirement years. That is a scary thought to some, and then others prefer to live life one day at a time and not worry so much about the future. If you are unsure about your situation, it might be helpful to find a good financial advisor who can show you different scenarios for different ages. Spend some time working on a budget and focus on expenses versus what you think you will bring in each month after retirement. 

To help with your budget, the most important and probably the first website you should visit is the Social Security Website https://www.ssa.gov/. On this site, you can plan for your retirement, get your benefits estimate, and more. Also, if you do plan on working part-time after you officially retire, then there is a limit to how much you can make before having to pay back $1 for every $2 you earn over the limit. So, you will want to become familiar with the rules surrounding Social Security and they can be found on the website.  

One of the biggest reasons people continue to work until age 65 is for health insurance. You can sign up for Medicare at https://www.medicare.gov/. once you reach 65. If you retire before 65, you could go on your spouse’s insurance if they are still working, or you can go to https://www.healthcare.gov/retirees/, to shop for a plan. 

Another thing to consider prior to reaching retirement age is life insurance. Many employers offer life insurance, but once you retire, you may find you are on your own. The younger you are when you buy insurance, the less you pay each month in premiums. 

What about having to retire or go out on disability? This is a process that can take a while, so you will need some support while you are going through the process. There are many health reasons someone might need to stop working before they are eligible to collect Social Security. There are many rules surrounding getting approved for disability. If you are in a situation where you find you can’t work, then you can apply.  You will need documentation from your medical providers.  It can take up to a year to get approved for disability in South Carolina.  If you are over 55, you are not required to retrain for an easier job, you just have to have documentation that shows you can not do the job you have been doing. You can not work while going through the process. This website can help walk you through the process. https://www.ssa.gov/disability. Some may choose to use a lawyer to help them instead of filing on their own. 

At the end of the day, your retirement years will hopefully be a period of low stress and anxiety. The age you retire is up to you. If your home is paid for, or you have low expenses, it may be easier than you thought to go ahead and retire. If you have lots of expenses, then it might be time to get some of them in check. Every dollar that you don’t have to pay at the end of the month is money you don’t need to earn. Some may choose to downsize or sell their homes for retirement. An article posted on the investopedia.com website, mentions that around 17% of people chose to rent versus own in retirement. While renting is subject to market rates, renters don’t have to worry about maintenance and upkeep which can cost more each year as a home ages. Also, many communities have functions that can help ease loneliness in retirement years. This article is a good one to think about the difference between the two options. https://www.investopedia.com/articles/retirement/07/buy-rent.asp. The National Council on Aging has some great budgeting tips for seniors. Number 7 on their list, is about using your home to stay in your home. It is worth reading if you are at a crossroads. https://www.ncoa.org/article/money-matters-top-10-budgeting-tips-for-older-adults.

A few months ago, I gave in and joined the AARP. The hotel discounts were too good to pass up. Now, they email me frequently with articles and information. I get a monthly magazine as well. I think staying informed helps me feel like I am doing all I can to plan. Besides, I am always looking for a bargain and AARP has some options for discounts. Another site, SeniorLiving.org has a page of discounts for eligible seniors for retail shopping. https://www.seniorliving.org/finance/senior-discounts/. When out shopping, it never hurts to ask if there are discounts if you are over 55.  

You will never make more decisions than you do when you retire. Your decisions will be based on your life, income, and expenses. Retirement is a time of change, and it can be exciting. Allow yourself to envision a new life, arm yourself with information and use a financial advisor if needed so that you can enjoy your journey! 

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