Pre-retirement


Retirement equals relaxation, right? In theory, retirement is a stress-free time with few hassles, commitments, or deadlines. However, getting there can be stressful. Retirement is a major life change, and adjusting to it can even be as stressful as life events like moving, marriage, and bereavement. Retirement may bring financial worries, social and emotional changes, and major changes in your day-to-day life.

Pre-retirement planning may help ease the transition. Pre-retirement is simply the time before you retire when you start focusing on and planning for what happens next. This is the time to plan; don’t let retirement sneak up on you. Pre-retirement is the time – while you’re still working and bringing in a paycheck – to make essential decisions about finances, health care, and housing. Here are a few key decisions you can make during pre-retirement that will make retirement even more relaxing.

Are You Ready to Retire?

Just because you’ve reached a certain age or because work has become stressful doesn’t mean it’s time to retire. Pre-retirement can be a time of self-reflection; ask yourself, “Am I ready?” Stan Hinden, Washington Post’s former “Retirement Journal” columnist lists three good ways to know you’re ready. First, the time is right. You’ve done your retirement planning and can tell yourself that you’ve worked hard all your life and it’s time. Second, you have other goals in life that don’t revolve around your career. Maybe long-delayed personal goals like travel or volunteer work are calling you. Third, your job is changing. Companies and company culture are always changing, and sometimes the transformations don’t benefit older employees. If you’re thinking about retirement, examine your job and see if the time is right for you to leave.

How Are Your Finances?

The reality of living on a fixed income takes some recent retirees by surprise. When you were getting a paycheck, that income most likely went up from time to time, but Social Security benefits and other retirement income usually don’t. Use pre-retirement to determine when is the best time to retire, financially-speaking. If you’re 65 now, how much more income (from Social Security or a pension) could you expect if you delay retirement until you’re 69? Weigh your options carefully.

How Will You Pay for Health Care?

Medicare, the federal health insurance program for people 65 and older, will play a large role in your health care in your retirement. Use pre-retirement time to research and understand how the program works; it can be complicated. If you plan to retire before you’re eligible for Medicare, look into supplement plans (sometimes called Medigap insurance). Also think about long-term care insurance. This type of insurance helps cover the costs of the care you might need down the road, including assisted living facilities or nursing homes.

Where Do You Want to Live?

Does your idea of retirement involve warm winters and palm trees? Pre-retirement is the time to do research on where you want to settle down after you retire (if you want to move at all). Find out about local and state taxes; for example, some states don’t tax retirement income. Some states have lower property taxes. Look into the cost of living.

Take your retirement destination for a test drive. Use some vacation time and visit the area. Instead of staying in a hotel, rent a house or apartment for a few weeks (try a booking site like VRBO or Airbnb). Check out the library, the grocery stores, the local community center and the gym.

What Do You Want to Do?

On a busy day at work, you may fantasize about staying home and relaxing all day – doing “nothing” in your retirement. But doing nothing doesn’t work for most people. Retirees who don’t have hobbies or activities often suffer from depression and loneliness. So, think about what you want to do – maybe you want to volunteer, help out with grandkids’ sports and activities, or take college courses. Use pre-retirement time to seek out retirement activities you might enjoy. You can also plan ahead – start practicing retirement by giving these activities a “test drive” on the weekends or during vacation time.

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