Financial Awareness for Retirement Ready
You’ve always lived below your means and were a diligent saver, and now you’ve built a pretty sizable nest egg. Or maybe you’ve just been lucky enough to work for a company that has a well-managed 401(k) plan and has always matched your contributions. However you did it, you now have a reasonable retirement income that, with the help of Social Security and possibly a pension, provides you with a comfortable retirement lifestyle. So, you’re all set, right? Not necessarily. Here are six ways to prepare yourself for the next bout of economic trouble.
Even if you have never worked under Social Security, you may be able to get spouse’s retirement benefits if you are at least 62 years of age and your spouse is receiving retirement or disability benefits. You can also qualify for Medicare at age 65.
The United States has bilateral Social Security agreements with 25 countries. The International Social Security agreements improve benefit protection for workers who have divided their careers between the United States and another country. They also eliminate dual Social Security coverage and taxes for multinational companies and expatriate workers.
When enough financial advisors start saying the same thing at the same time, it’s usually a good idea to listen – especially when they’re saying you have no idea what you’re doing with your retirement.
Voya Financial’s Retire Ready Index found that a subset of U.S. workers is all too willing to hand over the responsibility of their retirement planning to their employer. Among workers participating in an employer-sponsored retirement plan, 33% are saving only the amount their employer will match with their own contributions. About 20% couldn’t even be bothered to figure out what that amount would be and saved an amount pre-determined by their employer. Just 17% contributed up to the maximum amount allowed by their employer’s plan, while 29% said they used “some other method” to determine what they should contribute.
Far more than merely an economic event, retirement is a life redefining milestone. Leaving work and transitioning to a different way to spend your time and money can change your identity. One trick: an open mind regarding leisure, learning, family and, believe it or not, even more work. Many unhappy retirees have enough money. They simply failed to come up with a new idea of who they are and what they do after the working years ended. Planning finances to understand how you can afford to leave – and how long you can support the lifestyle you want – looms large. You needn’t retire just because you reach a certain age or a certain dollar amount of savings.