After all the hard work you’ve put into the work force, you think you’re finally ready to retire and relax. There’s a lot of other things you should consider besides reaching the age of 65 before you officially stop working. Before you slide into the life of retirement, stop and think. Do you have all your bases covered? Here are some things to consider before retiring and living on a fixed income.
Are your vehicles paid off?
Retirement not only means having the freedom to do what you want because going to work is no longer a part of your daily life; but it also means you now live on a fixed income. If you still have car and mortgage payments, those bills can really take their toll on your wallet. Wouldn’t it be nice to not have to worry about the car or the home payments? Most people plan on retiring around the age 65. When you’re considering it, or nearing that age, a good thing to do is to take a look at your vehicles. Are they newer? Are they reliable and do they fit your current lifestyle or the lifestyle you plan to have once you retire? If not, consider purchasing a new vehicle and paying it off before you stop working. Paying off your vehicles not only give you one less bill, but it often times lowers the cost to insure your vehicle.
Is your home paid off and do you want to retire where you currently live?
The only reoccurring expenses you really want to have once you retire are your power and water bill, insurance and your food. Of course you’ll still have your annual property taxes you have to pay on your home as well, but keeping your bills to a minimum will give you more freedom in your finances. Before retiring, think about what your hobbies consist of and where your family is located. Is your home located in an area where you can enjoy your hobbies or family? Take a look at the climate as well. Do you like the weather where you are or are you itching to try somewhere new? Some people also like to move to one of the few states that don’t have state income tax. These states are: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming.
Are your investments matured and can you access them?
Most people have some sort of investment that they have contributed to for the purpose of retiring. Whether it be a roth ira, a 401k, stocks, saving bond, mutual funds, ect. An important thing to take note of before entering retirement is if these investments have matured and if you have reached the age where you can access the money without penalties. By waiting for the right time to access your money you receive special tax benefits.
Do you have an emergency fund or any liquid assets?
Having a little money set aside for emergencies can never hurt. You never know when something unexpected like a medial issue or a broken laundry machine is going to hit so its good to be prepared for those rainy days. Knowing your liquid assets can help too if it gets to that point.
Retirement is a wonderful time of life, and being prepared for it makes it that much sweeter.