The Rule Of Thumb For Retirement Income
The Rule Of Thumb For Retirement Income
Ah, Retirement. Such a big milestone that all of us look forward to reaching one day. When most people think about their future retirement, it probably looks something like sandy beaches and margaritas, making it very likely that we forget to think about the scary thought of how we are going to build up a sustainable income to last through retirement. One way to make sure we keep our retirement income in the back of our mind, is make a checklist.
Anyone can make a retirement plan, but what actually counts is if it is followed through with. By creating a checklist tailored to your situation, the process itself can start to seem a little easier to tackle. Having a checklist is also a great way to keep yourself accountable and make sure you are taking the steps that need to be taken.
So what are some ideas to include on a checklist? Here are a few good options:
Work towards eliminating all debt
Ideally we could all begin retirement debt-free. The reason being that if debt is not paid off, the payments could take up a large portion of your retirement income. To get a head start on this, a good game plan could be to pay off the debts with either the highest rates, or the smallest balances, first. Making sure your debt gets taken care of is extremely important. To help keep you on track, you could ask someone you trust to hold you accountable.
Have your Health Insurance plan in check
Healthcare costs account for an average of 11% – 15% of retirement spending (depending on the retiree’s age), according to the Bureau of Labor Statistics’ Consumer Expenditure Survey. When purchasing a plan, make sure to know what your coverage will be as well as how much money you can expect to pay in premiums, deductibles, co-pays and out-of-pocket costs. If you retire at or after the age of 65, you can largely rely on Medicare for your retirement needs. You can research Medicare’s coverage options and costs at their official site.
Prepare an Estate Plan
An Estate Plan is one of the best ways to ensure your estate will not go through probate. Approximately 55% of people do not have any sort of estate plan in place. When everything you’ve worked so hard for is on the line, think ahead and create a solid plan for yourself and your family.
At our office, we host monthly Estate Planning Workshops, in partnership with attorney Will Worsham, for anyone interested in gaining some insight on what Estate Planning is and why it is important. Our next workshop will be held on Tuesday, December 18th. If you are curious about it or want to come, you can call our office anytime for more information or to reserve a spot.
Know what your needs are
The important thing to remember here is to be realistic. Take a look at your home, vehicles, and/or other assets you possess and see if everything is absolutely necessary, or if downsizing could be an option for you. There’s nothing wrong with downsizing if it could help contribute to income. Creating a visual timeline for your income needs throughout your retirement length could help to be proactive in planning.
These are just a few ways to help kick-start your retirement income planning. It’s always important to do your research, discuss with your loved ones, and have a game plan. If you have any retirement or financial related questions, call our office or stop by anytime.
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