Is 2019 the year you retire? Congratulations! However, you’ve got a lot of planning to do, says CNBC in the article “If you’re planning to retire in 2019, here’s how to make sure you’re prepared.” If you’re seeing your next stage of life as full retirement, semi-retirement or an adventure into the unknown, you should start preparing and dedicating a fair amount of time to what’s coming next.
While we hope your retirement was planned, many of the people who retire—60%—do so because of health issues or because they were laid off and could not get another job. Others have continued to work long after they expected to, sometimes because they don’t see a reason to not keep working.
Whatever category you fall into, your first look should be at your finances.
Do you know what your expenses are? You can’t know how much you’ll need for retirement, unless you know what you are spending right now. Maybe you won’t be buying expensive suits for a sales career. However, you’re still going to need to buy clothing. If you are like most retirees, you’ll want to fill your free time with all of the recreational pursuits you couldn’t do when you were working. That may include travelling, entertainment, sports and other activities—all of which cost money.
Pay off any debt you can. The less debt, the better.
Healthcare is one of the most overlooked costs for retirees. Once you reach 65, you’re eligible for Medicare. If you retire at or past that age, the program is available to you. However, it does not cover everything. The single most expensive item not covered: long-term care. Dental, vision and hearing care are not covered either.
You will also need a Social Security strategy. You can file for benefits any time after age 62, but you’ll increase your benefits by some 6% to 8% every year if you delay filing up to age 70. We don’t see those kinds of returns too often. If you work part time, you’ll need to find out how that income impacts your monthly benefits.
Even though you’re retired, you have to pay taxes. Your taxes will depend on what kind of retirement accounts you have: traditional IRAs, 401(k)s, Roth IRAs, etc. Not all sources of income are taxed the same way.
If you don’t already have an estate plan in place, don’t wait until you retire to get this done. Speak with an experienced Cincinnati estate planning attorney, who can help you create a will, power of attorney, health care directive and examine tax strategies for your estate and to protect your family.
Remember: “An ounce of prevention is worth a pound of cure.” When making your estate plan or when probating an estate or administering a trust, do not go it alone. Be sure to engage a Cincinnati estate planning attorney.
For more information about estate planning, probate or trust administration in Cincinnati (and throughout the rest of Southwest Ohio) and to review free resources regarding estate planning, probate or trust administration, visit my website. If you have questions regarding this article or a particular legal matter, feel free to contact me at 513-399-PLAN (7526).
Reference: CNBC (Nov. 4, 2018) “If you’re planning to retire in 2019, here’s how to make sure you’re prepared.”