If you’re just a few years away from retirement, congratulations: You’ve worked hard to build a strong financial foundation. But even as you near the finish line, there’s still important work to do. There are several key steps you can take to retire with confidence and get the most out of the years to follow.
Choose Your Ideal Retirement Location
Where you reside in retirement can significantly affect both your lifestyle and your finances. Some people opt to move closer to loved ones or to a more agreeable climate. Others choose to relocate to a state with lower taxes or a more affordable cost of living. Your environment plays a big role in your happiness, so choose a retirement destination that supports your goals and well-being.
Define Your Purpose
Retirement is more than just an end to your career—it can be a truly meaningful new chapter. Take time to reflect on how you want to spend your days. Beyond leisure activities, consider whether you want to engage in volunteer work, pursue a passion project, or even start a part-time business. Having a sense of purpose can make your retirement years far more rewarding.
Map Out Your Spending
A realistic budget is essential for a comfortable and secure retirement. Calculate your expected monthly and annual expenses, including those that don’t occur regularly, like travel or home repairs. Don’t overlook potential future costs such as healthcare or long-term care insurance, which can be some of the biggest expenses retirees face.
Evaluate Your Investments and Savings
Review your financial portfolio to ensure it aligns with your retirement needs. You may find you need to bump up your savings rate or adjust your retirement date so you can fully fund your desired lifestyle. This is also a good time to consolidate scattered financial accounts, which can simplify management and potentially reduce fees.
Create a Social Security and Medicare Strategy
The age at which you claim Social Security can have a major impact on your total lifetime benefits. Your wealth advisor can help you pinpoint the optimal age to tap into your benefits. Make sure you also familiarize yourself with Medicare enrollment rules to avoid penalties. Consider whether you’ll need supplemental or long-term care insurance: Planning for these potential expenses now can help you avoid financial stress later.
Develop a Tax-Efficient Withdrawal Plan
Planning the order and timing of distributions from your taxable, tax-deferred, and tax-free accounts is important in minimizing the taxes you pay on your retirement income. This approach can help you reduce your overall tax burden, keep more of your money, and extend your retirement income.
We’re Here to Help
Your wealth advisor can guide you through every step of retirement planning—by helping you make informed decisions, steer clear of common mistakes, and develop a personalized strategy to begin an exciting chapter of your life.
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