3 Questions to Answer Before You Retire

Is retirement approaching on the horizon? If you’re like most people, retirement is your ultimate financial goal. It’s your opportunity to take control of your schedule and live life on your terms. Perhaps you want to retire as soon as possible.

Timing is important, though. If you retire too soon, you could deplete your assets and run out of money before you reach the later years of retirement. Retire too late, and you might miss out on valuable years that you could spend pursuing your dreams.

What’s the answer? When is the right time to retire? There’s no universal right answer for everyone. Your decision on when to retire should be based on your unique goals, objectives and needs. Consider your desired lifestyle, your family obligations and perhaps even work commitments that you need to complete before you retire.

Not sure if you’re ready? Below are a few questions to ask yourself as you make your decision. If you don’t know the answers to these questions, you may need to do some more planning. A financial professional can help you develop your strategy and solidify your retirement plans.

What will you do with your free time?

If you’re like most people, you’ve been looking forward to retirement for years. But have you given thought to what most days in retirement will look like? Many retirees initially enjoy their free time and their lack of work commitments. It’s common, though, for many retirees to grow frustrated or bored over time. Some even suffer from depression or anxiety because they feel like they no longer have purpose.

Boredom can have an impact on your financial stability, too. Many retirees choose to fill their free time with things like shopping, travel and dining out. The risk is that you may deplete your assets in the early years of retirement and have few assets remaining in the later years.

If you don’t know how you’ll spend your time in retirement, now may be the time to think about your options. It’s often helpful to write about your ideal day in retirement. How would you spend your time? What activities are most important to you? Think of ways you can enjoy retirement without excessive spending.

When will you file for Social Security?

Social Security is a valuable resource for retirees, and it’s likely to play an important role in your financial picture. It’s one of the few retirement income sources that’s guaranteed for life, so it can provide much-needed financial stability.

Your benefit amount is based on a few factors. One is your career earnings. The other major factor is when you file. You can file as early as age 62. If you file before your full retirement age (FRA), however, your benefit could be reduced as much as 35 percent.1

However, you don’t have to file at your FRA. In fact, you can delay your filing all the way to age 70, and you could significantly increase your benefit amount by doing so. Social Security offers an 8 percent annual benefit increase for each year past your FRA that you wait to take benefits. If you can afford to delay your benefits, this could be a way to increase your retirement income.2

What’s your backup plan?

You may have a strategy for how to fund your retirement. As you likely know, however, plans are disrupted all the time. The market could take a downturn, limiting your ability to generate income. You may face serious illness or even a need for long-term care, and the related costs could drain your retirement assets.

What’s your backup plan to deal with these potential risks and more? You may want to talk to a financial professional about how you could better manage risk. For example, you could use an annuity to guarantee your income or minimize volatility. You could consider long-term care insurance to reduce your out-of-pocket costs.

Ready to plan your retirement strategy? Let’s talk about it. Contact us today at Spicer Wealth. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.

 

1https://www.ssa.gov/planners/retire/agereduction.html

2https://www.ssa.gov/planners/retire/1943-delay.html

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

17845 – 2018/7/30