4 Things To Think About Before Retiring
Hi, Vince Oldre, Certified Financial Planner and I want to talk to you about the four things you need to think about before retiring. These are a lot of things that people have questions about when they’re about to retire, so I want to make sure you think long and hard about these four issues.
Number one is healthcare. What should you do about healthcare in retirement? Well, number one, we realize it’s one of the leading causes of inflation, but we also know it can be pretty expensive, especially if you’re gonna retire before age 65. That’s because you won’t have Medicare if you’re going to retire before age 65. What can you do? Number one, you can go Cobra, which is pretty expensive because you’re paying premiums for yourself, but also the premiums that your company was paying for. Number two, the other option is, if you’re married, you could go on your spouses insurance, and number three, you can go onto a private insurance.
Now we all know that private insurance can be more expensive and it might not be as easily to get because, you won’t get the same types of benefits that you might get with your company plan. That’s why a lot of you will go under Cobra insurance. And obviously, if you can go on your spouses insurance, that would be the best thing.
Besides healthcare, we also have to think about taxes. Taxes will equate to almost a third of your income when you’re in retirement and it’s not just your Federal and your State income taxes, it’s also going to be your property taxes and so forth. With the recent tax changes, what we know is that, the property taxes or the State income taxes that you used to be able to write off, you won’t be able to use that as much. So taxes are gonna be a significant part in retirement and if you’re not calculating your taxes, that could hinder what your overall retirement picture might look like.
The third thing that you need to think about is whether or not you are going to move. What does your home look like? If you are planning on downsizing or leaving, you also have to think about what your income looks like. A lot of us don’t realize that we need the income to apply for another mortgage. If you are going to have a mortgage while you are retired, you need to think about how you’re gonna apply for it and what the rules are around applying for a mortgage. A lot of times, it all revolves around income and they look more at your guaranteed income sources, like Social Security, Pensions, and making sure you’ve had income coming from your investments for a longer period of time. So, before you jump into retirement you want to think about whether or not you’re going to move.
The fourth thing you want to think about is the market. Market is at all time highs right now, so, how are you allocated? Are you diversified? Are you not diversified? Are you a passive investor? Are you actively managing your portfolio? All these things need to be taken into consideration. You’re accumulating your assets, now accumulating your assets is much different than distributing your assets. While you’re accumulating your assets, you don’t have to worry about the fluctuations in the market as much because you’re accumulating the assets and the average will come out over time. But, if you’re taking assets out, that means you are selling at highs and lows, and when you’re accumulating you don’t have to worry about selling at highs and lows. So make sure that you have a plan for your income distribution.
Those are the four things that you need to think about before retirement. If you have any other questions around retirement planning, please give us a call or, send us an email and we’ll make sure to answer your question.