9 year Mortgage: 5 Important Tasks to Prepare for Retirement

9 year Mortgage: 5 Important Tasks to Prepare for Retirement

9 Year Mortgage knows that when you get only a few short years away from retirement, it is time to get your financial ducks in a row. Here are five tasks to be completed a few years before the transition.

Examine all of your company benefits. The obvious benefit will likely be your 401k, but there may also be others. Perhaps your insurance coverage can continue? Maybe there are other benefits you can continue at a reduced rate? Are there company stock options you haven’t used yet? Where the 401k is concerned, there are different options. You can leave it with your current employer, roll it into an individual retirement account, or take a distribution. The latter will likely result in a large tax bill, so here at 9 Year Mortgage we recommend either of the first two options.

Look at pensions from current and former employers. If you have a pension benefit, there may be several decisions you will need to make regarding your plan. Make sure to contact any former employers that have a pension available, and get them your current information. The plan rules for each pension will determine whether or not you take the money immediately upon retirement, or wait a while. 9 Year Mortgage advises that often the benefit will be greater if you wait until age 65.

In addition, some plans give you the option between a monthly lifetime payment, or a lump-sum payout. 9 Year mortgage suggests making this decision in the context of your overall financial situation. If you feel able to manage a lump-sum, it may be an option. However, as the lump-sum would be taxable, it would be smart to roll it into a tax-deferent, like an IRA.

Figure out your Social Security benefits. 9 Year Mortgage believes that the most important decision to make in this category is when to start receiving your benefit. You may start receiving at age 62, but there is a significant increase if you wait until your full retirement age. Your benefit will actually increase up to age 70 if left unused for that long. If married, planning this should involve both spouses’ benefits. If you plan ahead, it can be easy to use strategies to maximize a couples benefits together.

Determine all of your financial resources for retirement. At 9 Year Mortgage we know that many people preparing to retire are financially cluttered. As well as 401k’s with their current employers, there may be IRAs with old employers, for each spouse, a variable annuity, stocks, bonds, taxable investments, mutual funds, and the list goes on. This is all good to have, but it is important to organize it into a comprehensible portfolio. This should be something you have done before retiring, It is vital to have a handle on what resources you actually have.

Take stock of how much money you will need from your resources to support your retirement lifestyle. Then compare this to your projected income in retirement. This may seem obvious, but many people haven’t done it even a few years into retirement. The best is to start now, and look at all your assets, namely, Social Security, pensions, any part-time income, etc. Compare this to your lifestyle on a monthly budget, and determine how much you need to take from your investments each month. If the gap amounts to more than 4%, 9 Year Mortgage suggests reassessing your retirement lifestyle or working a bit longer before retiring.

At 9 Year Mortgage, we realize that this checklist is very brief and basic. Proper planning can make your retirement enjoyable and successful. If you feel that you need more help than this list provides, it may be wise to speak to your financial advisor.

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