If your retirement isn’t as far off as it used to be, it may be time to do a retirement fire drill. Most people get to choose when they retire, but you don’t want to be caught in a situation where you HAVE to retire and can’t.
So how do you have a retirement fire drill? Easy enough – pretend you are now ready to begin the retirement phase of your life. Here are few areas to use when you conduct your fire drill:
- Your budget: Have you made a retirement budget? Of course you have – but is it going to work? Have you addressed what your source of income will be once your paycheck isn’t coming in anymore? Have you eliminated unnecessary expenses? Finance professionals say you should be able to retire on 70% of your income – is this accurate for your needs?
- Do you have enough medical coverage? If you are retiring before the age of 65, keep in mind that you won’t be eligible for Medicare until you hit that magical number. How do you plan to bridge the gap between coverage times? Did you work insurance premiums into that retirement budget?
- What is your income strategy when you are no longer working? Even if you retire at 65, there is a very high chance that you and/or your spouse will live to at least the age of 85 and a 45% percent chance that at least one of you will make it to the age of 90. Is your income gong to last?
If you’ve uncovered a few problems doing this little fire drill no worries – you still have time. Use the information you’ve uncovered in this practice drill to get your retirement finances in order.
Until next time, this is Dr. Jack Singer.