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Monday, September 30, 2013

Don't retire until you've done these 5 things

A one year delay in Social Security income could increase annual payout by 8%
Meet with HR to optimize benefits
By Stephanie Lynch 

Retiring can be an exciting time for anyone, however, before you jump the gun and leave your job, you're going to want to make sure that you're on the right track to a successful and stress-free lifestyle. There are so many potential retirees out there that think they are ready to retire, when in reality, they really aren't.

To make sure that you're ready to hang up your badge and kick your feet up by the pool, you should have these five things accomplished after retirement planning:

1. Crunch the numbers


Since no money will probably be rolling in, you're going to have to ask yourself how you're going to get your paycheck. Are you living off interest? Are you going to live off stock dividends? Bonds? Social Security? I think you get the point here. Add up your numbers, don't forget to add in inflation and see what you're able to come in. Once you subtract the bills and potential emergencies, are you comfortable with this number? Please remember that when you're retired, you're going to have A LOT of time on your hands, so you're going to want to have a good chunk of money to spend.
When crunching the number, also keep this in mind:

• Review your investments. Are you comfortable with them? How secure are they?
• Develop a withdrawal strategy. How long can you tap into your funds before they are exhausted?
• Are your expectations reasonable?

2. Meet with human resources


Before you just leave the job, be sure to talk with the Human Resources department. Let them know that you're thinking about retiring. Most reputable companies will be able to discuss your options and see what can be offered. The last thing that you want to do is retire early and find out that if you would have stayed one more year, you could have received more in a buy out or pension.

3. Get rid of debt


Before you even consider leaving your job, take a good look at your debt. No, I'm not talking about your basic needs like health insurance and utilities. I'm talking about your credit cards, your mortgage and anything else that can be wiped out completely. Paying off these debts are going to reduce your high interest rates and give you a lot more freedom to spend your money when the time comes.

4. Cashing out too early


Don't just cash out for the easy cash. Even if you're qualified for your IRA and 401(k), you have to 
ask yourself if it makes sense to tap in. The same can be said about Social Security benefits. By tapping in early, this could lead to a lot less money in the future. For example, experts state that for every year you delay, you can see an additional 8% in your check. Always make sure that you know how much you can get if you wait long enough.

5. Prepare


Retirement is a lot more than about money. You also have to think about other things such as your future home plans, healthcare and your loved ones. With that being said, make sure that you explore your home insurance and medical insurance options to make sure that you're covered in case of a damage, theft or long-term illness. By creating a plan, being comfortable and knowing what's going on, there's no reason you won't have a great and successful retirement that you can enjoy for years to come!


About the author: Stephanie Lynch is from howmuchisit.org, a website that is dedicated to helping people find out what things cost. Check out 3,500 guides that range from finance to professional services.

* Image license: Woodsy; RGBStock royalty free