For most of the Americans, retirement looks a lot different this year than what it used to look in the past. The economic impact of the COVID-19 pandemic has been severe, and this even forced many people to retire early. Hence, they retired with much less money than what they need. Regardless of whether your retirement plans look secure, this is certainly a great time to review where exactly you stand financially.
When you’re all set to retire, there are few basic things that need to be done before you surrender the ultimate security and comfort of your job. Apart from an SMSF setup to ensure a passive source of income, there are few other important money decisions to make about your health insurance and Social Security. Keep reading to know more.
- Choose when you should start your Social Security payments
At the age of 62, you become eligible to claim your Social Security benefits. Did you know that you can boost your monthly payments if you choose to receive the Social Security benefits after attaining the full age of retirement? Every year you delay, the monthly benefit increases by 8% till the age of 70 years. To receive updates on how much money you’ll receive from SS, you can sign up for a Social Security account.
- Don’t miss out on your workplace benefits
When you have a vision or a dental coverage at your workplace, you may choose a new pair of glasses or visit a dentist before retiring. Similarly, if your company gives you matching contributions, then seek help of them by matching your contributions annually before retiring. In case your child has a college scholarship that is sponsored by your employer, check whether the scholarship will continue after you retire.
- Cross-check your retirement benefits
Before you retire, confirm your eligibility for any retirement benefit or pension that you’re entitled to at work. Make sure you also check whether you qualify for any benefit from an old employer. If you have worked at two or more places during your career, check whether you can collect any income from them. Don’t forget to check whether you get a health insurance policy at a subsidized rate.
- Sign up for health insurance or Medicare
The coverage for Medicare kicks off when you hit the age of 65 years, irrespective of the full retirement age required for Social Security. Whenever you engage in some sort of program, you’ll have to decide about Medicare supplement plans and drug coverage plans. In case you retire before you reach 65 years of age, you must find out ways of receiving your medical insurance which is not connected to your job. You can also get coverage through the health insurance marketplace of the state until it’s time for you to qualify for Medicare.
- Draft a financial plan
There’s more to drafting a financial plan than just deciding on an IRA or 401(k). Try to create a budget that contains details of the income that you expect from pensions, Social Security, investments, retirement savings, and part time job. Once this is done, get an idea of how much money you’re going to spend. Whatever it may be, you should have a clear idea of what your expenses are going to be for a minimum of 2-3 years. Include an emergency find for unpredicted expenses.
Therefore, if you’re someone who is ready to retire, you should keep in mind the above listed tips to ensure a safe and secured retired life.