Seeing Grey Hair? Here is What You Need to Do Before You Retire

Quite often, people don't plan ahead for retirement and are in for a reality check when they see their first grey hair. As you grow older and your retirement age comes closer, you should start considering when would be the right time to retire, where to live, what kind of lifestyle to adopt after retirement, and whether you should take an MCI test for cognitive impairment.

Hence, it is highly advisable to start many years ahead, even as early as your first paycheck so that you can make a smooth transition into your retirement phase. Here are a few ways in which you can prepare for a contingency plan.

1- Decide when to claim your Social Security benefits

Most people claim their social security benefits the minute they find themselves in a financial crunch. The best way to deal with social security is to wait until you have reached the official retirement age of 66 or 67. Otherwise, you will find yourself locked into a reduced monthly payment, and it will cost you more money in the long run. Claiming it at the age of 62 would reduce the payments by 25%, but if you wait until your actual full retirement age, you are entitled to an 8% increase every year.

2- Don’t be tempted to withdraw from your 401K

Much like social security benefits, withdrawing from your 401K can be tempting during periods of financial stress. If you withdraw it nonetheless, the money will no longer grow. So, let it sit and look for alternate options.

3- Plan out your housing options well ahead of time

Start exploring cheap retirement relocation options like nursing home services and assisted living  facilities in your area, especially if they have a long waiting list. There are a variety of resort-style retirement communities which are primarily designed for healthy and active adults, and for people with less dependence, whereas long-term care facilities are for those who need medical or personal care. People facing dementia or Alzheimer's disease are generally required to stay in long-term care. Read more about what causes dementia and rule out any early signs.

If you want to stay at home, research the cost of hiring help at home. Learn more about what is and what is not covered by your insurance and Medicare. This way, you won't be in for any unexpected surprises. For example, Medicare doesn’t pay for nursing home care, and many people learn this fact when the need arises, leaving them in an awkward spot.

4- Work on your health insurance options

You shouldn't underestimate health care costs in your planning as not many insurance companies offer decent retirement packages. In fact, lack of proper insurance coverage can be a leading cause of staying in debt. Many bankruptcies result when sudden and expensive medical concerns are faced by senior citizens. Long-term care insurance can help you battle high costs associated with unexpected medical treatment or potentially needing long-term care.

5- Be wary of risky investments

Investments that promise a great return within a short span of time may seem like a great option, especially when retirement seems just around the corner. But let us warn you. Anything that promises returns that are too good to be true generally turns out to be a fraud.
Avoid investing all your money in risky businesses such as speculative stocks. If you really want to, consult a financial adviser and invest a portion of your savings in different stocks. Mutual funds are also a good alternative. When planning for your retirement, stick with safe choices so that you can get your money back when you want it.

6- Stay away from sources of high-interest debt

One of the biggest threats to a retirement budget is high interest debt. You'll be shocked to know that credit card debt has a high interest rate of up to 20%. Similarly, student loan debt doesn’t go away on its own and the government can withhold your Social Security benefits if you have unpaid student loans. So, be very careful and tackle any high-interest debt before you reach your retirement age.

7- Pay off your mortgage

One of the most important things that you must do before retiring, is to pay your mortgage. If you don’t pay it in time, you will find yourself in a sticky situation as the interest rate can become very high.

8- Talk with a tax-expert

You don’t want to face hidden tax burdens during retirement. When an individual's ‘combined income’ exceeds $25,000 as a single person, your benefit becomes taxable. However, each person's situation is unique, so the best way is to get professional insight and sit-down with a tax expert who can help you to reduce your overall tax burden after retirement.

9- Don’t be caught up in wishful thinking

Most senior citizens are caught up in wishful thinking and when things don’t turn to be as they expected them to be, they tend to get depressed. Everyone thinks about how their life will be when they retire. But only envisioning it and not doing any preparations for it will not make it come true.
Just like any other phase of life, retirement needs proper planning and research. So, sit down and explore your options and choose the kind of lifestyle you want and can afford after you retire. Once you have an idea of the expenses, start working towards saving up so that you can reach your goal before retirement time.

10- Don’t forget to live in the moment

Retirement is considered as a carefree time when you finally get to experience all the things that you've been dreaming of, whether it is traveling with your partner or just lounging around in your lawn chair and watching the sunset.

Once you retire, you'll have a lot of time on your hands but a limited amount of money. So, plan smartly and invest in risk-free areas so that you are able to live the life of your dreams after retirement. However, don’t stress yourself trying to save for the future. Live in the moment, and if you get a chance to splurge on a dream vacation - do so! Enjoy every stage of your life as it passes by.

ABOUT Alycia Gordan
Alycia Gordan is a freelance writer who loves to read and write articles on healthcare technology, fitness and lifestyle. She is a tech junkie and divides her time between travel and writing. You can find her on Twitter: @meetalycia

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