You’ve worked hard over many years and finally your retirement finish line is 3-to-6 months away.
But don’t start exhaling just yet—there’s still plenty of race left to run. Before you take one of the biggest steps of your life, make sure you read this list to understand what you need to do and why:
1. Do the math.
When you first thought of retirement years back, you probably had a vague idea of what your spending would amount to by the time you actually took this step. But at this point, you should have a much clearer picture of your monthly budget. Be sure to laser in on your fixed expenses as well as on your lifestyle expenses to determine your financial needs.
“Potentially the most important decisions baby boomers make before entering retirement are about income planning. I often recommend waiting to begin drawing Social Security as long as possible—and using 401(k) or other accounts first—to maximize the monthly income,” says Dan White, founder and president of Daniel A. White & Associates, based in Glen Mills, Pennsylvania. “The volatile economy is pointing many toward the value and stability of defined benefit programs, such as Social Security, pensions and annuities, that give retirees piece of mind. Avoiding these decisions until it’s too late can mean worrying about running out of income later in life.”
While you can start taking Social Security benefits at age 62, your payments will be reduced based on the number of months you take those benefits before you reach full retirement age. And if you take a part-time job in retirement, that could reduce your Social Security payments, says Katie Libbe, vice president of consumer insights at Allianz Life.
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