By Robyn A. Friedman
City & Shore PRIME
According to the Social Security Administration, about 10,000 baby boomers retire each day. But to have a successful retirement — to enjoy family, travel the world, engage in sports or partake in hobbies — it takes preparation.
Planning to quit the workforce for good next year? Experts say there are several things you should be doing now.
Review your household budget. Understand how much you currently need to live and what your sources of income are, including savings, pensions, retirement funds and Social Security benefits. “Don’t underestimate your expenses in retirement,” says Michael Silver, a certified financial planner with Baron Silver Stevens Financial Advisors in Boca Raton. “When you have a lot of free time, you tend to spend more money.” Because so many retirees are healthy these days, they’re dining out and traveling more. That may lead to unexpected expenses — as can the cost of healthcare, which tends to increase as retirees age.
Make sure you have healthcare coverage. If you’re 65 or older, you need to sign up for Medicare, at medicare.gov. Don’t wait — there’s a penalty for delaying enrollment in Medicare unless you have separate health coverage. If you’re not yet 65, line up coverage through the individual market — which could be pricey depending on what Congress does to the Affordable Care Act.
Look at all your Social Security options. Dionne Polite, AARP Florida’s acting state director, recommends adopting a strategy that will maximize your Social Security benefits. “If you have adequate savings or another source of income, it may make financial sense to delay claiming your benefits until later,” she says. “For every year you wait to claim Social Security, your benefits rise about 8 percent.”
Rebalance your portfolio. Adjust your investment asset-allocation strategy so that it generates retirement income.
Create a new social life. Preparing for retirement doesn’t just involve health coverage and income. “For many of us, our workplace and our work colleagues can become like a second family,” AARP’s Polite says. “When we leave the workplace, sometimes we can feel adrift for a while, cut off from our regular schedule and social connections. Start to build structure, a regular routine, into your new life — and seek out new friends and new experiences.” Volunteering in the community can be rewarding — and it’s a great way to build new connections.