Ready to Retire?

Retirement: the ultimate reward for decades of early mornings, late nights, and hard work. It’s your chance to finally backpack Big Bend, take up line dancing, or dive into that pile of DIY projects. But before you trade in an office view for wide, open spaces, make sure you’re ready for this transition financially and emotionally.

Financial Planning

Achieving and maintaining financial security in retirement is crucial. Not only will it ease some of the stressors that come with aging but you’ll also be able to enjoy the life you’ve built.

The earlier you start financially planning for retirement, the better. This can include investing in your employer’s 401(k) or an individual retirement account — or, ideally, both. But, as you get closer to retirement, you should take on more conservative investments to protect your nest egg and reduce your risk of loss.

While it’s hard to think about, estate planning should be on your preretirement list. In fact, it’s something you should address well before retirement if you have assets to protect or pass down. With a will in place, you know your wishes will be honored and your loved ones protected. Also, no matter what stage of life you’re in, life insurance is a critical tool in the estate planning process.

In the months leading up to your retirement, create a budget that includes your estimated living and health care expenses. Generally, most Americans are eligible for Medicare starting at age 65. If you retire before then, you’ll need to consider temporarily extending your coverage through the Consolidated Omnibus Budget Reconciliation Act (or COBRA); getting on your spouse’s plan; or buying a Texas Farm Bureau Health Plan, which provides a range of benefits including coverage for office visits, preventative care, hospitalizations, and more.

Tally up anticipated income sources, such as retirement accounts, investment returns, and Social Security. This will let you know what you’re working with. Being financially ready for retirement also means thinking seriously about your debt, Social Security benefits, and tax implications.

In a perfect world, we’d all enter retirement debt-free. Carrying credit card debt, car loans, or a mortgage into this new phase of life can dwindle your newly adjusted monthly income. Make a plan to pay off as much debt as possible before you retire.

Americans can apply for Social Security benefits between ages 62 and 70. Of course, you’ll get your maximum benefit if you hold out until 70. Social Security benefits are a significant source of income for the majority of American adults over the age of 65. In fact, nearly 40% of adults 65 and older would have incomes below the poverty line without Social Security benefits, according to the Center on Budget and Policy Priorities. Before you retire, calculate how much you can expect to earn from Social Security each month.

Taxes don’t go away when you retire; they shift. Some Social Security benefits may be taxable. Also, if you withdraw money from your individual retirement account or 401(k) before a certain age, you may face penalties.

Lifestyle Changes

A successful and happy retirement extends beyond finances. Get the most out of your retirement by staying healthy with a regular exercise routine, strengthening your social connections, and finding renewed purpose outside of your previous job. For some retirees, that may involve volunteering or learning a new skill. For others, it’s elongated road trips and quality time with friends and family.

As with any major milestone, keep your Agent in the loop. If retirement is on the horizon, it’s time to sit down with your Agent for a 360 Review. Together, you’ll take a systematic look at your insurance policies to make sure you’ve got everything you need as you enter this exciting, long-awaited chapter.

Preparing for retirement is more than just saving money. It’s about getting the very best from your golden years.

Don’t wait. Learn how to start saving for retirement today.