Planning for your retirement is more critical than a space shuttle mission. In the same manner, you will be isolated from the options you previously had and will be forced to maintain yourself in the capsule you have created. If you get sick or something happens, what fail-safes do you have in place to ensure a safe landing and redeployment? Retirement is a fact of life. If you have been blessed enough to live past the retirement age and have take care of your health, you are better prepared to weather the next half of your life.
For healthy individuals with good health care, retirement can last longer than the years they spent working. In this manner, it makes sense to diligently plan and prepare for retirement while you are still young. One of the biggest issues to consider in retirement is how your investments are working for you without having to manage them anymore. It is generally not a good idea to simply save up a cushion of raw cash for retirement. The inflation rates have the potential to whither down that pile of cash over decades. If you have a pension, stocks, bonds, and a portfolio of investments that are certain to ripen over time, your money is working for you.
Retirement is the ideal time to vacation and enjoy the finer things of life that you put off to focus on your career. Travel is an important part of keeping your neurons active and fresh so that you retain your mental acuity in your old age. Learning to play a musical instrument and challenging yourself are the secrets to preventing mental morbidity. Exercising and remaining active can be fulfilled with golf, fishing, swimming and hours of serene walking in that scenic paradise you’ve prepared for yourself.
Healthcare is paramount to protecting your livelihood. Living in the US has its privileges of access to some of the best medical centers in the world. You will likely qualify for Medicare and will have your choice between optional coverage plans that can save you significantly over time. Choosing the best retirement age is equivalent to choosing the correct weather to launch your space mission. You are going to be up there for a while and a lot is at stake, delaying your retirement as long as possible is always in your best interests.
If you retire at 65 or older, you will automatically be eligible for Medicare in the United States. But, this health coverage will not provide any help if you plan on retiring in a foreign country like many people eventually wind up doing. You may be able to obtain an expensive COBRA plan from your employer that provides long-term coverage. Investing in extended care insurance for nursing home and other rehabilitation facilities will bolster your protections.
One of the biggest mistakes that early retirees can make is rolling over their 401K into a Roth IRA. They are simply prohibited from accessing the cash when they need it without paying a steep 10% penalty. The IRA puts you on track to liquidation of your earned retirement income by forcing you to withdraw funds or face huge tax penalties. It is important to speak with a financial consultant in all phases of your retirement planning because the rules can be complex and arbitrary.
If you live below your means and invest more into the market, you will have money working for you without doing anything. This not only gives you capital to liquidate if you should need it now, but it is also developing the fundamental skills for a smooth retirement. Buying a smaller house, learning to fix your own vehicle, learning how to cook ethnic foods that are tasty and inexpensive, and having different entrepreneurial ideas working in the background, will help you avoid the popular pitfalls of consumerism that rob people of their retirement savings.
The biggest costs of living are for automobiles, home payments, and food. If you can reduce these three elements to the minimal by learning how to be handy and how to live on cheap foods that are tasty, you have a powerful advantage. In foreign countries, the people make very marginal incomes individually. By living a more communal lifestyle with large families that stick together for life, they are able to use their combined incomes to accomplish the same as a very wealthy individual or a small corporation in America. If you provide an incentive for your children to remain living in the same household and sharing the same food, this can save significant money on elder care and the day-to-day costs of living. Investing in a tight-knit family that shares a communal spirit is by far the biggest advantage you can make in building a stronger retirement.
Considering all this great wisdom for retiring now will help you live a long happy life by preparing every day for the long haul.