How can you know when and if you are ready to retire? What should you do to prepare? While entering this phase of life can be exhilarating, it has the potential to be overwhelming just like any other new and different experience.
Retiring can be both successful and fulfilling but it requires proper advanced planning, education on the do’s and don’ts, and savvy know-how about the tips and tricks of the trade. In this blog we will provide some resources and information to better prepare you for your retirement!
First, you can ask yourself a few questions about whether or not now is the right time to retire!
- WHO do I want to spend my retirement with? Is it important to have friends and family nearby?
- WHAT financial resources do I need? What will I do with my time? WHERE do I want to live?
- WHY do I want to retire? Is it really time? Am I financially ready? Are my friends and peers retired?
- WHEN do I want to retire? What is my goal age and approximately how long will I be retired?
- HOW do I want to live my life? Do I plan to maintain my same quality of life?
According to the U.S. Department of Labor, the average American will likely spend at least 20 years in retirement, though fewer than half have calculated how much they really need to save. Further, with modern medical and techno- logical advances, people are living longer and more active lives. It is estimated that retirees need revenue of at least 70-90% or more of pre-retirement income in order to maintain their standard of living.
You should not retire before you understand exactly how to do so successfully nor should you retire just because you have reached a certain age. If you love your job, there’s no reason to stop working before you need or want to. In some instances, letting your money grow a little while longer may be the wisest course of action.
Expect the unexpected. Emergencies and unforeseen occurrences can and will arise during any stage of life. Be sure to calculate in the costs of various scenarios: a new roof or car, living past age 100, nursing home costs, a market downturn or even inflation. And don’t forget to review trusts, wills, powers of attorney, and beneficiaries.
Here are a few dates that will help you stay on track!
- IRA contributions must be made by April 15each year.
- For retirement funds, the first required minimum distribution must be taken by April 1of the year after you turn 70 1⁄2.
- 401(k) plans and minimum distributions from traditional retirement accounts are due at the end of each calendar year on December 31.
- Medicare beneficiaries can make changes to their prescription drug coverage each year between October 15 and December 7.
- The IUPAT Pension Fund recommends submitting your pension application approximately 90 days prior to your anticipated retirement date.
- You can sign up for certain Medicare plans during a seven- month time period before you turn 65. However, Medigap has a different six-month initial enrollment period that begins when you’re 65 or older and only after you’ve enrolled in Medicare Part B.
- You can sign up for Social Security beginning at age 62. However, payments are reduced if you sign up before you reach full retirement age.
Realistically evaluate your retirement needs. Do not assume that you can live off less or that downsizing will always be the practical option. Consider: are your debts paid off? Are dependent children still a factor? What about elderly parents? Additionally, it may also be a good idea to involve a spouse, partner, and other immediate family members in the decision-making process; they may have insight to share. And while it is true that the ultimate decisions are yours to make, your retirement can be a major change for everyone in your life.
Granted, in today’s world, retire- ment is no longer the guaranteed rite of passage that it used to be. But it is still a beautiful part of life. For a novice retiree, it is a new phase with its own rewards and challenges. Organizations like the IUPAT and the International Pension Fund work hard to make a successful retirement for its participants a reality.
Have more questions? Feel free to contact us and speak to someone at the International Fund about your pension plan, obtain an estimate of your benefits, submit an application, or anything else, contact 1-800- 554-2479 or firstname.lastname@example.org.