Get Ready to Retire with These 3 Simple Steps

As you approach the build-up to retirement, the need to implement plans for a happy retirement intensifies. Unfortunately, 64 percent of Americans are unprepared for retirement according to a Go Banking survey. While it can be difficult to imagine life at 70 plus, the best way to ensure you have a great retirement is to begin planning early. Whether it is having a discussion with your spouse on your retirement goals, writing a will, securing life and critical care insurance, or the all-important one, saving for your retirement, these decisions can take time and some thought.

Get Clear About How Much You Will Need For Retirement 

One of the things many people are uncertain about is how much they will need during their retirement. Having a ballpark amount of your financial needs during retirement gives you a clear goal to work towards. Most financial experts recommend aiming for 70 to 80 percent of your pre-retirement income while firms like Fidelity say you should save at least 15 percent of your pre-tax income for retirement. A good way to figure out how much you need in retirement is to work backward, starting with guaranteed costs and income sources such as Social Security or private pension payments. Once you have an idea of what your minimum costs are (and income each month) you can then work towards closing the gap.

Focus On Reducing Your Debt As Much As You Can

These days, more Americans are retiring with debt than ever before. Data from the Federal Reserve Bank of New York revealed that more than half of Americans expect to retire with some debt. Meanwhile, debt among senior Americans has increased a whopping 543 percent. However, managing your bills and your debt on a retirement income can be difficult, particularly if you choose to stop working. Therefore, accelerating your debt repayments in the years before your retirement can give you (and your retirement finances) some relief. As for how you pay down your debt, the approach is up to you. Some people supplement their income with a side hustle while others work overtime or begin cutting back on their expenses.

Have Your Retirement Income Options Mapped Out

Before you retire, you will need to consider what your retirement needs are, how much you will need for retirement, and how you plan on funding your retirement. Most people opt to invest and save for retirement but an increasing number of seniors are choosing to work flexibly well into their retirement. Deciding to continue working or set up your own business after retiring is not just about your finances. Think about the impact on your social security and Medicare charges along with its implications for your retirement goals.

Another thing to think about is your investment options for retirement. When you are younger, you can pursue an aggressive investment strategy. However, as you approach retirement age, you may want to consider reducing your risk tolerance in your investment portfolio to stabilize volatility. This is also the time to increase your contributions to IRAs and Health Savings accounts ahead of retirement. If you want to simplify the management of your investments, consolidating your IRAs or appointing an IRA custodian can help. However, it is recommended that you consider factors like IRA custodial fees or alternative asset fees you may incur.

Lastly, get used to your retirement lifestyle before you enter retirement. A good idea is to slowly transition to a retirement lifestyle by making consistent changes such as reducing your spending to retirement levels. Think of it as giving your retirement budget and goals a test drive. This gives you the chance to adjust any plans before you retire.