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If retirement is in your near future, there are some things that you should think about before taking the plunge. Retiring can be scary for everybody, but especially to those who are approaching the time without a firm plan. Here are some things you should take into consideration before retiring.
Get as much retirement counseling as possible. Talk to a financial planner or attend retirement workshops to get a better idea of what to expect and how to approach the planning. Try to get the process at least a year before your actual retirement date, so you have enough time to make changes if necessary. In fact, experts recommend that you start planning four to five years before retiring, so you can go through the whole process at your own pace rather than worrying extensively about it.
Determine what expenses you will have after retiring. Do you have outstanding loans or credit card debt? Will your mortgage be completely paid by the time you retire? How do you plan to live after retiring? Will you travel and if so how often? DO you plan on spending money on your hobbies? Where do you plan to live? Will you keep your present home or do you plan on downsizing?
Develop a plan. If you intend on keep working part-time after retiring, you may have some health coverage or additional income coming your way. Either way, you will need to apply for Social Security benefits at least three months before your actual retiring year. You also need to research Social Security benefits, government pension plans, and life insurance coverage to know what to expect after retiring.
Retiring without having set aside emergency funds is a common mistake. Besides the money that you need for everyday living, plan on having a set amount for urgent situations such as unexpected travel expenses, car or house repair, and even emergency medical care. Having a separate emergency fund means that you won't have to dip into your savings.
Other question to ask yourself before retiring is if you are ready for retirement, both financially and emotionally? Some people do not deal well with retirement, so you may be better off going into partial retirement rather than doing it all at once.