To many, the thought of retirement brings up a flurry of emotions, from excitement and anticipation to fear and anxiety. It can be scary to imagine life without a steady paycheck coming in from a job, but that’s exactly why we’ve been encouraged and conditioned to save into our IRA’s, 401(k)’s and other Qualified Plans during our working years.
There are a couple of meaningful things that happen to “free up” your retirement plans once you attain age 59 ½. Here’s what you need to know if you are approaching this milestone, so that you can make the most of this opportunity to plan for your golden years.
REVIEW YOUR FINANCES
Whether you are someone who has been adding to your retirement funds since you were young, or someone who began saving later in life, its important to review your finances in detail before pulling the trigger on retirement.
Many factors affect how much money it will take for you to afford to retire comfortably. Things like the amount of debt you have, your income in retirement, your living expenses, and the amount you have saved, all play an important role in determining what will work for you. There is no magic number, or amount someone needs to have saved to retire successfully, instead its individual. Based on whatever it costs to be YOU.
When turning 59 ½ you have the ability to do a couple of things that really matter, relative to your planning:
- You can take penalty free withdrawals from your retirement plans.
- You can complete an in-service withdrawal to rollover balances that were typically tied up in Employer Plans.
Because of the availability of these balances, you can expand your options for investment.
WORKING WITH A FINANCIAL ADVISOR
Considering all of your finances and how it relates to your retirement by yourself can be daunting and difficult, which is why its always recommended that you consider working with a financial advisor who specializes in retirement planning. The earlier that you talk to a financial advisor about your retirement plans, the better, but of course you can consult a professional at any step in your retirement process.
A financial advisor will take into consideration your current financial situation, your assets, and any wants, needs, or goals that you have for life after retirement. Combining and weighing out all of these factors will allow the advisor to work with you on putting together a plan that’s uniquely ideal for you, and then assist with implementing that plan on your behalf.
CONSIDER EASING INTO RETIREMENT
Retirement doesn’t necessarily mean that you’ll never work again!! These days many people find enjoyment in their work, or second careers, and decide to stay on the payroll part time. Transitioning doesn’t have to be an “all or nothing” approach, and many times that provides comfort to new retirees who are concerned with drawing down or outliving their assets.
THINKING ABOUT POST-RETIREMENT LIFE
It might be useful to begin separating your identity from work the older you get. Its extremely easy to get ourselves wrapped up in our jobs, and when this happens, it only natural to wonder what you’ll do and who you’ll be once you retire?! Its useful to consider the kind of person you are outside of work. Ask yourself what you enjoy doing. Also think about any causes you are passionate about, so that you can pursue volunteering for the charities and non-profits that mean something to you.
Truth is…as people settle into retirement, many times they have no idea how they ever found the time to work!
FINAL THOUGHTS
Knowing that you are approaching retirement can be nerve-wracking, but if you prepare yourself ahead of time, you can ease into retirement smoothly. If you are 59 ½ it is the ideal time to hire an advisor and start. Call us today at (724) 801-8935 to have a plan created that allows you to retire your way.