After years of hard work, you're probably feeling anxious to retire. But before you make the leap, ask yourself these five questions to determine whether you're really ready to quit working.
What will you do in an emergency? Planning a strict budget is a common retirement mistake. There is no way to guarantee that unexpected expenses will never take you by surprise; in fact, it's almost certain that you will experience a financial emergency at some point! Make sure you have some cash set aside for unexpected bills, home repairs, and so on.
What are your current living expenses? How is your current budget for living expenses? Many people can't afford the same high standard of living in retirement, which means you could be forced to give up some luxuries. If you think that might be the case for you, don't wait until retirement to make a radical change in your lifestyle. Begin to slowly fade out unnecessary expenses now, so that retirement isn't such a shock.
How much debt are you carrying? You will enjoy retirement a lot more if you aren't saddled by debt. Be honest with yourself about credit card debt, car loans, and so on. If you have to work a bit longer to pay off these balances, it's probably worth it. You can enjoy your retirement more without piles of bills.
Are you still making a large house payment? For most of us, our largest debt is our house payment. If you're still making that payment as you're getting ready to retire, ask yourself whether you really need such a large, expensive home. You might be happier if you sell your home, access the equity, and pay cash for a smaller house or condo. This isn't a good option for everyone, but at least consider what it might be like to live free of a house payment.
Have you prepared for medical expenses? Many retirees are shocked by the medical bills they encounter as they age. Medicare does not pay 100 percent of all the services, medications, and equipment required by most beneficiaries, and you will be responsible for the balance. Before retiring, research the average cost of health care in retirement, and consider long term care insurance, Medicare supplemental plans, and other ways to manage your expenses.
All of these questions require some intricate calculations. That's why we're here to help! Call us to schedule an appointment, and we can help you assess your retirement readiness.
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