Counting pennies? If you’re considering retirement within the next five years or so, you’re about to be faced with a number of important choices, and the decisions you make before retirement, as well as during, can have long-lasting consequences or rewards. The choice is yours!
Counting Pennies, No More
The years leading up to retirement are a period of transition. This time can be confusing and chaotic, but it doesn’t have to be. The key to retiring comfortably is to recognize the long-term effects of the decisions you make today.
How Much Annual Income Will You Need?
First of all, if you don’t already have a projection of the annual income you’ll need in retirement, spend the time to put one together now. Estimate the income you’ll be able to rely on from Social Security and any other benefits, and compare the result with your projected retirement income needs. The difference may need to be funded through your personal savings. Are these savings sufficient to provide you with the annual income that you’ll need? If not you’ll need to look into an additional income option like a reverse mortgage to cover the remainder, and then some.
Social Security Benefits
You can begin receiving Social Security retirement benefits as early as age 62. However, if you wait to retire after 65 (67 for some people) your benefit may be as much as 20 to 30 percent more. Be sure to weigh your options, and choose the start date that makes the most sense for your individual financial circumstances.
Stable Monthly Income
Although there are a number of things to think about when transitioning into retirement, ensuring that you keep a stable monthly income is essential. If your post-retirement finances are going to be too tight for your comfort, consider bringing in more income through a reverse mortgage.
Note: The longer your retirement period, the greater the potential that inflation will eat away at your purchasing power. That means the earlier you retire, the more important it is to account for market changes in your overall plan.