5 Tips for Retirement Planning
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Are you planning to retire soon? If so, you’re in good company (in the next seven years, approximately a fifth of the U.S. population will reach the traditional retirement age of 65.). Here are five things you can do to put your best foot forward in this next phase of your life.
1. Maximize employer benefits
Determine your eligibility for a pension or other retirement benefits through your employer and consider maximizing contribution limits in your retirement accounts—you can save up to $30,000 in a 401(k) or $7,000 in an IRA. You may have an open 401k through a previous employer—contacting the HR department with your details (such as your social security number) can connect you to those funds. Do you have health coverage through your job? Take advantage and schedule some dentist or doctor visits.
2. Determine Social Security payment
Social Security benefits will likely be an important source of income for you in retirement. Find out how much you can expect to receive in benefits by visiting SSA.gov. While you’re eligible to claim payments beginning at 62, your full retirement age varies depending on what year you were born. You may also want to consider delaying your Social Security benefits to receive a larger monthly payment (payments grow by roughly 8% every year up to age 70).
3. Assess your financial picture
Review your current debt and determine how much you’ll need to cover basic needs, such as housing, food, and healthcare and discretionary categories such as travel or hobbies. Drafting a budget will help you understand how much you can afford to spend and how much you have coming in each month from Social Security, pensions, or part-time work.
4. Sign up for healthcare
You can enroll in Medicare beginning at age 65. Healthcare costs can be a major expense in retirement, so it’s important to plan ahead. Consider buying additional health insurance to cover any gaps in Medicare coverage and be sure to factor in the cost of prescription drugs. You may also want to sign up for a health savings account (HSA) to help you save for healthcare expenses tax-free.
5. Meet with a financial planner
Your financial institution may be able to connect you with someone who can review your retirement portfolio and suggest adjustments—for example, transferring your 401(k) funds to an IRA or Roth IRA which can offer you more investment options and ability to diversify your holdings. A financial planner can also help strategize your budget. Reflect on what you want this time to look like, and be intentional in communicating your goals.
GreenPath is here for you
GreenPath offers free financial counseling and education to assist in assessing your financial situation and creating a personalized plan to achieve your goals. GreenPath works with thousands of people each month to pay off debt, improve credit and lead a financially healthy life. It all starts with a conversation for you to create an action plan to work toward your specific goals.