5 Things To Have in Place Before Retirement
Whether you are just a few years away from retirement or you are planning ahead, there are a few things you need to have in place before you can finally call it quits at your day job. This plan will help you make the most out of your fall back savings and will negate the hassle and worry of having enough money to live off of. Joyce CPA, LLC in Cutler Bay, Florida specializes in this internal audit wants to educate you on all you can do to in order to enjoy your freedom stress-free.
Check out our list of five things to have in place before you retire:
1. Assess Your Savings
If you are a young professional looking into planning your future funds, hopefully you have looked into 401k plans, investing, and planned a savings budget. For more experienced workers, you may already have a decent chunk saved. Assessing your savings will help you determine how much annual income you can spend. The typical yearly withdraw rate is 4%, so if you have $500,000 saved, that translates roughly into an annual income of $20,000.
2. Map a Retirement Budget
Budgeting should be a tactic you use for most of your life, and it doesn’t change once you reach this stage of your life. Map out a budget for your expected expenses so that you can properly delegate spending habits. This includes looking at current bills, changes in lifestyle, among other factors. Your budget is likely to change once you hit a certain age, and there is more you can do when you finally leave your job in order to enjoy these years more freely. Getting rid of access payments such as multiple vehicle expenses is one way to budget yourself to spend your money leisurely.
3. Determine Healthcare Costs
The amount of money seniors spend on healthcare costs can be surprising. You want to look at these costs so that you can budget accordingly. The average 65 year old today spends anywhere between 185,000 to over 210,000 on medical throughout the rest of their life.
4. Plan on Claiming Social Security
Social Security funds typically make the bulk of your golden year income. These benefits are calculated according to how much you earn during your career, but depending on when you claim social security, these numbers can go up or down. Talk with a CPA about your internal audit and create a strategy on what age you should plan on claiming social security. Full retirement age usually falls between 66 and 67. Claiming before this time will take away some of your monthly benefits, while claiming after this age will boost your income.
5. Plan Your Free Time!
Planning your free time will not only take away the unease of no longer working full-time, but it also helps with your budgeting. You may want to stay at home and indulge in fruitful activities, or you might want to travel. Planning your free time will help direct you and your money so that you can make the most of your benefits.
Do you have more questions about the internal audit process? Are you planning your fall back funds? Contact Joyce CPA, LLC in Cutler Bay, Florida to get you started!