Life is unpredictable, and there are a number of events that can impact our finances, from global pandemics to personal crises. And while adjustments sometimes may need to be made to get back on track, no one wants to put off an event like retirement because they feel forced to. It’s important to take stock of what you have and what you’ll need if you’re nearing or entering retirement. No rule says you must put off retirement, or that your desires are beholden to the state of the world when you reach retirement age. Here’s what to consider to make sure you’re ready to retire regardless of what’s going on in the world:
Calculate How Much You Will Need To Cover Expenses
It’s hard to create a financial plan for retirement without knowing just how much money you’ll need. Expenses like a mortgage, taxes, health care costs, as well as the cost of leisure activities like travel, are all important to factor in. And whether you plan to retire in a crisis or not, it’s vital to have an emergency fund. Knowing how much you’ll need to retire can give you a better sense of when you can retire.
Decide On A Social Security Maximization Plan
If your financial or employment situation has changed due to coronavirus, you may be rethinking your Social Security claiming strategy. While you can claim Social Security benefits as early as age 62, you will receive a permanently smaller benefit. If you wait to claim past your full retirement age, your benefit will increase by 6 – 8% per year you defer until age 70.[1] If you and your spouse are entitled to a spousal benefit, when you claim will also factor into how large the spousal benefit is.
List Your Retirement Income Sources
Social Security will be one source of income in retirement, but you will likely need others to supplement it. A pension can be a steady source of income in retirement, but if you won’t receive one, you may be looking for an alternative. Turning savings and investments into retirement income is an important part of planning. Start by listing all of your retirement income sources and seeing how they match up to your expenses.
If a crisis has upended your retirement date, now is the time to take action. It can be hard to know where you stand when everything is in flux. We can help you create a solid retirement plan by looking at your retirement income sources and strategy. We’re offering complimentary financial reviews so we can get a sense of your unique financial needs and concerns, get in touch with us to learn more.
