Retirement Planning

Retirement planning is a process that involves preparing for your future. However, retirement planning can be complicated due to the financial and physical preparations it requires.

These preparations include saving money and moving to a retirement community (if applicable) that are required for a successful retirement. As a senior, the types of retirement plans that you need focus on the later stages of retirement preparation. Due to differing financial situations, you must determine when and how you would like to retire to ensure you can receive sufficient benefits and extra money to fund your lifestyle.

The following sections explain how to plan for retirement as a senior and answers to age-related retirement questions that may make you apprehensive about your retirement. While your situation will depend on your participation in retirement plans like a 401k or pension, you can create an optimal retirement plan to overcome any financial or physical barriers to your retirement.

Types of Retirement Plans

While retirement planning requires personal preparation, various plans offered by your employer may be able to assist you in saving for your retirement. The following list details the different types of retirement plans you may have from working with your employer or other organizations:

You are encouraged to contact your employer to determine which plan you may have, if any. This will help you decide whether you would like to begin withdrawing from those accounts.

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If you have these retirement plans, then you want to ensure the money remains accessible during your retirement, and withdrawing money too early can cause you to receive less money. Similarly, Social Security spousal benefits or other benefits provided by the Social Security Administration (SSA) you receive after retiring should be preserved until your retirement is well underway.

How to Plan for Retirement

Although it may seem like planning for retirement is unhelpful as you get older, continuing to plan and pursue your ideal retirement as a senior. You can use these tips to help maintain a retirement plan that allows you to retire when you want.

  • Know your retirement needs and plan accordingly. You can utilize retirement calculators or simply assess your spending habits to determine your retirement needs. You should try to have enough income to replace 70 percent of your pre-retirement earnings. Because your retirement consists of a good portion of your older adult life, you should have a clear idea of the type of retirement you would like to have. You should also figure out how your retirement planning can realistically provide you the resources you will need.
  • Wait to touch your retirement savings. The longer you can wait before cashing in your Social Security benefits, investments and retirement savings, the more financially healthy you will be. While you should always put money away for unexpected expenses, you should begin spending money on your retirement once you are debt-free and feel comfortable that you can support yourself and your family with your retirement funds. In other words, avoid relying on your retirement money to support you before you have paid off other expenses.
  • Communicate with your employer about your retirement. Your employer often controls your retirement plan, so he or she is a great source of information on retirement. You should talk with your employer to ask questions you may have regarding your plan’s policies and tell them when you plan to retire in the form of a letter. While there is no best time to do so, you are advised to tell your employer about your impending retirement at least three weeks prior to your intended leave date.
  • Continue to add to your savings. As retirement approaches, you should avoid reducing your saving amounts. In fact, many should increase the amount they add to their savings in preparation for their retirement. However, careful savers may struggle when it becomes time to spend retirement funds in hopes to maintain enough money to last them for future years. Try to balance your saving and spending throughout your retirement to alleviate the financial burden of retirement.

Retirement Income Planning

Retirement planning success is dependent on the amount of money seniors have access to during their retirement. The types of retirement plans available seek to provide seniors with enough financial stability to retire, but seniors may still be unsure how much they need to retire comfortably. According to retirement experts, the average U.S. citizen can expect to spend about 22 years in retirement. However, how much money seniors will need to last through those years depends on their lifestyle and spending habits. Nevertheless, there are helpful strategies to ensure you have plenty of money to safely retire. The following advice can facilitate late retirement planning and aid in reducing financial issues during retirement:

  • Have six to 10 times your final salary in savings. Although some retirees may require less money to live while other may require more, this guideline can help retirees save an appropriate amount of money before they retire.
  • Stick to the 4 percent rule. Be ready to adjust your retirement withdrawals based on the market economy, but you should try to limit your annual withdrawals to 3 or 4 percent. By dividing your annual spending by four percent, you can determine how much you should withdrawal each year to maintain your lifestyle post-retirement.
  • Consider finding additional sources of income. If you are physically able and can devote some time throughout the week, you may benefit from taking part-time positions. Seniors are encouraged to find jobs in retail or other industries that have flexible work hours and require limited physical labor. Jobs for retirees are valuable and may give seniors a more consistent routine post-retirement.

Seniors are also encouraged to take advantage of programs such as the supplemental security income (SSI) and the senior farmers market nutrition program (SFMNP) to attain additional income and resources that can help them throughout their retirement. While the goal would be not to need these programs, seniors should never hesitate to apply for them in times of financial or nutritional need before or during retirement.

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