Saving for retirement can take decades. If you’re nearing retirement, plan beforehand.
Amy Richardson, a financial counselor with Schwab Intelligent Portfolios Premium, recommends five actions for retiring in five years.
1. Create a budget
Richardson recommends first reviewing or creating a financial strategy.
“Your short- and long-term goals What’s your retirement lifestyle? These questions will drive the following few phases “explained Richardson.
If you need support, consult a financial planner. Free internet resources abound. Richardson suggests utilizing a retirement calculator.
2. Save what you can
Even if you’re currently saving, you should boost your retirement funds in your final years.
“Put as much as you can into retirement funds or brokerage accounts,” Richardson added.
She suggests automating to save. “I trust automation. I do it for myself since it’s a habit “saying,
Automate IRA and brokerage account deposits. While 401(k)s are automatic, increasing paycheck savings could assist.
3. Check your 401k
After saving more, be sure your account can support you in the coming years.
“Make sure your retirement portfolio is diversified,” she said. As retirement approaches, our risk tolerance decreases and we worry more about principal.
Making sure your portfolio isn’t just in equities or one region helps ensure you have money when you retire.
4. Plan for health insurance
After you retire, your health insurance may end.
“Retirees’ largest expense is healthcare. If you retire before age 65, you’ll require private health insurance “saying,
It’s costly. Your employer may have paid all or part of your healthcare bills before retirement, but you’ll be liable for the insurance and other fees until you qualify for Medicare.
5. Consider retirement’s non-financial aspects
A big part of retirement is deciding how to live.
“It’s not about retiring and lazing on the couch, but choosing what work to do and when,” she remarked.
You should start planning well before you leave your work. Knowing what you want to accomplish and how you want to live can help with preparation and ease the transition.
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