When it comes to retirement — or any future event — we may not have as much control over what will happen as we’d like, if any at all. However, there are steps pre-retirees and retirees can take to help plan for some unknowns now and face the road ahead with more confidence.
Heyday contributor, Tom Hegna, literally wrote the book on how to retire happy. Here are six steps retirees should consider to help set themselves up for a more enjoyable retirement, based on the insights in Mr. Hegna’s book, Don’t Worry, Retire Happy!
1. Have a plan for retirement - as we mentioned in this Forbes article, saving isn’t the final step in retirement planning. Of course, saving is crucial. But the next step is just as important — planning what you need your money to do in retirement, as well as what you’d like it to do. The strategy you create should incorporate your retirement goals, concerns, expenses and income.
2. Maximize Social Security benefits - there’s a lot of misinformation surrounding Social Security benefits. It’s important that all retirees know what they are estimated to receive if they retire at the earliest eligible age. They should also compare that amount to what they’d receive if they wait a few years. Fortunately, there are online tools available to help pre-retirees make an informed decision.
3. Consider a hybrid retirement - in today’s flexible work environment, there are many part-time and even remote job opportunities out there. Retirees could welcome this as an opportunity to turn a hobby into a part-time job, or reinvent themselves and try on a completely different career path. Although working part-time in retirement isn’t for everyone, there are many benefits to consider, including having additional income to save for retirement, as well as boosting potential Social Security benefits.
4. Protect yourself from inflation - at Heyday, we’ve discussed the topic of inflation at great length. While there are no ways to predict future inflation, there are several ways to calculate it, which can leave many retirees confused about how much it could impact their purchasing power. In fact, just a 4 percent annual inflation rate can cut the purchasing power of $10,000 nearly in half over 20 years! Creating an income stream that plans for rising inflation can help minimize its effect on your finances in retirement.
5. Secure a base level of lifetime income - most retirees will receive some level of lifetime income, from Social Security, pensions or a combination of the two. However, that amount may not be enough to cover basic living expenses. To help close this gap, retirees can create a retirement income plan that pays them monthly with guaranteed income for life.
6. Have a plan for long-term care - for many pre-retirees, purchasing a long-term care policy may not be feasible due to cost. However, there are other ways to help plan for a stay at a long-term care facility, including earmarking retirement income to help cover those costs. It’s best to consult with a professional to determine a plan for addressing long-term care.
What’s really great about these steps is that you don’t have to have millions in the bank to implement them and enjoy a more stable financial future. This blog post is meant to be a brief overview of some of the topics covered in Tom Hegna’s Heyday workshop, 4 Steps to Help Secure Your Retirement. If you’d like to learn more, you can watch his informative workshop on-demand at your convenience.
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