Retiring is a special time for any individual. It's when you get to relax, be with family and friends, or pursue a hobby you were always interested in but just never had the time to. Of course, as you approach this last stretch of your career, this also indicates a lifestyle change. Identifying these financial and personal changes and preparing accordingly can give you more peace of mind. Here are four things you should know if you're retiring soon.
Your health is at its most vulnerable state in your senior years. Retiring in your 60s, you'd want to make sure you have enough healthcare coverage to pay for costly emergency bills, medication, and assisted care services. If you are expecting financial aid from your Medicare plan, keep in mind that benefits do not start paying off until you're 65 years of age. If you are below 65, there are many other affordable healthcare options out there. Thanks to the Affordable Care Act, retirees are guaranteed coverage despite having any preexisting conditions. You also can't be charged more than what they are charging for someone in tiptop shape. Lastly, note that Medicare doesn't cover all health-related expenses incurred so check with your healthcare provider to make sure your specific healthcare needs are met.
Oftentimes, it won't hit you that fast, but the transition from a productive and active individual to a retiree can be mentally and emotionally uncomfortable. Most people only prepare for the financial changes but fail to devote any time or effort to the mental upheaval that comes with leaving the professional grind behind. And while you've been looking forward to some downtime from all the responsibilities and burdens of your personal and professional life, you might be surprised by how you're thrown into an emotional loop when you retire. Studies by the Institute of Economic Affairs suggest that 40 percent of retirees are at risk of suffering from clinical depression than working Americans.
Even when you're retired and laying on the beach while sipping some mojitos, you'll want your retirement funds to keep working for you. Financial growth should never plateau just because you've stopped earning a regular salary. Consider investing in stocks, real estate, currencies, commodities, and other assets that can help grow your funds. Because you’re investing in your 60s, a more aggressive approach may be needed since time is a limited resource. However, consult with your financial professional and consider your specific situation before making any investment decisions.
Social Security Benefits
At its core, Social Security is a financial safety net for retirees. It was pushed by Congress in the mid-1930s through Social Security Act. The program allows budding retirees to make scheduled contributions while they're employed. The plan then pays out after you retire. Federal Insurance Contributions Act or FICA taxes are deducted as contributions from your paycheck. While Medicare is commonly included in a SS benefits package, keep in mind that these two programs are different.
Before you hand out your two weeks’ notice and clean out your desk, make sure you've considered these important aspects of retirement. Your ability to relax and maintain your desired lifestyle after retiring is hugely dependent on your ability to plan and prepare for every possible scenario while you're still employed.