Preparing to Retire Determining If You're Ready

Retirement offers the chance to explore and enjoy experiences you didn't have time for during your working years. Planning ahead ensures you can do just that.

If you're getting close to retiring, make sure you're ready before taking the plunge. Here are some key steps to gear up for your golden years:


Calculate what you'll need. Identify where you stand financially before retirement. Will you be able to support your desired retirement lifestyle without earning a paycheck? If you're eligible for a military or other pension, that's great, but it may not be enough. You'll need to depend on Social Security and personal retirement savings, or perhaps a part-time job to cover any shortfalls. Creating a retirement budget can help you gauge your financial readiness.


Tally the timing. With good health, good genes and good luck, you may have three or four decades to spend in retirement. During those years, inflation may erode your purchasing power, and even modest inflation over a long period can have a dramatic effect. For example, $100 today would be worth less than half that in 30 years with three percent annual inflation. Working a few more years can mean more time to build up savings and increase your Social Security benefit instead of spending down your nest egg.


Consider Social Security. The earliest you can take Social Security retirement benefits is age 62, but think carefully before doing so. Taking early benefits means a significant and permanent reduction in your monthly benefit—as much as 30 percent less than if you wait until full retirement age. Waiting as late as age 70 means an even greater benefit.


Be aware of healthcare benefits. If you're retiring early, find out if you're eligible for military or employer-sponsored health benefits. If not, research your best options for covering healthcare costs until Medicare eligibility at age 65.


Plan to make your savings last. Fight the urge to go on a spending spree in the early years—it could deplete your savings too soon. Adjust the asset allocation of your retirement savings account or other investments as you near retirement to ensure continued growth.


Discuss retirement with your spouse or partner. Will it change the dynamics of your relationship or household responsibilities? What if one of you wants to spend all day on the golf course but the other wants to travel? Making sure you're both on the same page—or at least willing to compromise—is key.


Start dreaming. Staying busy can help you easily adjust and enjoy retirement. How you spend that time is up to you! Find ways to fill your time, be it travel, hobbies, volunteering or part-time work, to help ease the transition.

Next: Building an Income Strategy

Want to better manage your retirement savings?

Roll over your existing accounts into a Navy Federal IRA.

Not sure where to start? Contact a financial advisor at 1-877-221-8108.

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