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Here is a checklist on how to prepare for retirement:
- Build Your Emergency Fund
You should have a least 3 to 6 months’ worth of living expenses to cover you in case of emergency. This can also make up if there are delays in the start date of pensions or Social Security. It is important that you have saving our debts that will cover your bills in the event of delays.
- Estimate Your Retirement Expenses
Underestimating expenses is one of the biggest retirement mistakes people make. Your retirement expenses will depend on how you live during retirement. Your initial list of retirement expenses should include annual expenses such as real estate taxes, insurance premiums, medical expenses, and house & auto repairs.
- Explore Retirement Investments
There is no single approach to investment. You should look into various retirement investment options to learn how they could supplement for retirement income. Each investment choice has advantages and disadvantages. It is best to understand how each option works to help decide which is best for you.
- Anticipate Future Medical Costs
Learn about your existing health insurance benefits and how they change in retirement. Identify non- routine health expenses that isn’t covered in your existing health insurance. Consider having a health savings fund and supplemental coverage to help pay for your non-routine health expenses. Be proactive in evaluating your health insurance by conducting an annual review of your coverage options to ensure your insurance doesn’t lapse when you need it the most.
- Manage Your Debts
For many people, carrying debt in retirement is unavoidable. Managing debt will depend to your circumstances. To achieve the retirement lifestyle you will want, you need to tackle your debts and you can start off by paying the debts with the highest interest rates. This is usually credit card debt, followed by personal loans and car loans. The earlier you can formulate a strategy to confront it, the easier it is to tackle—and the better chance you give yourself of living the retirement you’ve envisioned.
- Calculate Your Retirement Income
You should create a timeline to show when different sources of income will come. This will help you manage cash flow and determine how much you need to save to retire.
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