Retirement Countdown Milestones

Retirement planning

One day you’re celebrating your first day at a new job, and the next thing you know, toasts are being raised at your retirement party. Taking action at these important milestones can help ensure your post-work life is more relaxing than taxing.

Savings are essential to a successful retirement. Many experts recommend saving at least 25 times your current annual spending. This rule of thumb also takes inflation into consideration.

1. Social Security Claim

One of the most important decisions you’ll make when it comes to retirement countdown milestones is whether to claim Social Security early or wait until age 70. Claiming early is a risky strategy that can lead to lower benefits and reduced income streams.

Ideally, the decision to claim or delay Social Security should depend on your personal situation and your goals. Your health, other sources of income, spousal or survivor benefits, and retirement age are all factors to consider.

For instance, if you are a disciplined and savvy investor, it may make more sense to invest your benefits instead of delaying them until full retirement age. Taking out your benefits earlier can be a tax-efficient way to free up more funds for your retirement nest egg.

2. Medicare Enrollment

Medicare enrollment is one of the first milestones to reach after retirement. It’s a good idea to begin this process about three months before your 65th birthday.

Depending on your age at retirement, you may have the opportunity to enroll in original Medicare or select a Medicare Advantage plan. A reputable insurance agent can help you decide which option is best for you.

You can also sign up for Medicare during the general enrollment period or a special enrollment period. The time periods for each of these vary based on your circumstances, but they allow you to make changes to your coverage without facing a late enrollment penalty.

3. Creating a realistic budget

Creating a realistic budget is an important step to making sure you don’t run out of money in retirement. Although it may be a daunting task, planning ahead can give you the peace of mind you need to enjoy your golden years.

Many financial experts recommend saving 10-15% of your pre-tax income for retirement each month while you’re working. You can also save in an individual retirement account like a traditional IRA or Roth IRA, which are tax-advantaged ways to start building your savings for retirement.

Using your income, spending habits, travel plans, health conditions, and other factors can help you create a more relevant estimate of your retirement expenses. Then, you can adjust your number based on your expectations. This can help you achieve a retirement that fits your lifestyle and needs.

4. Utilizing Healthcare Benefits

A healthcare plan of some kind will likely be an integral part of your retirement plan. A medical emergency could put your savings to the test, and a hospital stay can be downright costly. Fortunately, there are options such as COBRA and supplemental health insurance available to the uninsured or underinsured. The trick is to find the right mix of coverage and benefits that meets your budget and lifestyle needs. Having a solid health insurance policy in place can be the best way to avoid a financial disaster and help you live the happy and healthy life you deserve.

5. Long-Term Care Insurance

A major milestone for many people nearing retirement is their Medicare enrollment. However, if you’ve been out of the workforce for an extended period of time, you may need to rely on other insurance coverage to help cover the costs of long-term care services.

Buying long-term care insurance is one way to protect yourself against these unexpected expenses. The decision to purchase a policy should be carefully considered, with an eye towards the type of benefits you want and the features that make sense for your situation.

There are two main types of long-term care policies. Stand-alone and hybrid policies.