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5 Things to Start Doing When You’re Newly Retired

If you’re newly retired, you might be wondering if you’re on the right track for a happy and stress-free retirement. The first 6-12 months can be challenging because it’s a new lifestyle. You probably spent a lot of time planning in the years leading up to this life event, but is it going as well as you’d planned? Here’s a list of five essentials you’ll want to make sure you have covered if you’re newly retired:

 

1. Prepare Yourself Mentally

One thing is certain: You have a ton of time now. It’s a hard transition from working full-time to doing little or nothing. In the past, you spent most days tending to your job and family. But now that the kids have grown, and you’re jobless, you probably feel like you have too much time on your hands.

It’s time to focus on yourself. Now is the perfect time to think about what you want to do with the rest of your life. It’s also a good time to consider leaving a legacy behind for your children.

You probably don’t want to think about dying just yet, but reviewing your beneficiaries and writing a will, power of attorney, and living will could give you peace of mind.

Planning your estate now will help you enjoy the next 35+ years. You won’t have a guilty conscience about spending money on yourself if you know you’ve set aside money for your children and grandchildren.

 

2. Take Care of Your Health

Taking care of your body is crucial to having a good retirement. Neglect your health or overlook getting enough insurance coverage, and you’ll spend your senior years struggling.

Remember that as you get older, your need for medical care will increase. Is it time to get more coverage? While Medicare helps, it will only cover about two-thirds of your health care bills. You are left with such costs as:

  • Prescription drugs costs
  • Dental, vision, and hearing expenses
  • Co-payments

Medicare Gap Insurance, also known as Medigap, could help with some of the costs. Medigap is private supplemental insurance that covers you where Medicare doesn’t. It’s a good idea to get this extra coverage, but keep in mind that it has payments of its own. Find Medigap companies on the Medicare website.

Part of taking care of yourself means planning for long-term care. Almost 70% of all people older than 65 will need long-term care, according to the U.S. Department of Health and Human Services. However, public insurance programs like Medicare have several stipulations and may only cover short periods. Purchasing long-term care insurance is a good strategy to avoid placing the burden on your family members.

 

3. Control Expenses

Cutting costs is one of the best ways to make your money last throughout your retirement. First, estimate your expenses and differentiate between must-have expenses, and nonessential costs. For most people, must-halves include food, health care, housing, and transportation.

Once you’ve figured your must-haves, think about everything else. Before you pack your bags to travel the world, consider the legacy you’d like to leave behind. Maybe there are charities you’d like to donate to, or money you’d like to use to help a grandchild through college.

 

4. Work or Volunteer

Okay, working is probably the last thing you want to do, but what if you discover something that cannot possibly be considered work? What’s the one thing that makes you lose track of time because it’s so exciting or fun? Taking up a part-time job or building a business out of a hobby could be an excellent way to spend your time.

Besides the obvious benefit of having more money, you’ll find purpose by contributing to the community and will gain new co-workers to keep you from getting bored.

Volunteering or caring for a grandchild is another excellent way to stay busy.

Here’s another question: Can your hobby be taken online? Starting an online business doing consulting, or selling items on eBay or Etsy is one of the most cost-effective ways to have a business. Your new biz could help add more cushion to your retirement.

 

5. Diversify Your Income

How do you protect yourself from financial disasters like 2008? Don’t put all your eggs in one basket. Cover your must-have expenses with a reliable income such as social security, pension, or Roth IRA. Guaranteed income sources like these are best to take care of your basic needs.

Then, use investment income like low-cost index funds, CDs, bonds, and real estate to cover all other expenses, including traveling and estate planning. Investment income will give you more returns on your money, but it is a higher risk. For that reason, it’s a good idea to diversify with a combination of guaranteed and investment income.

 

Conclusion

Planning and setting the right goals continues throughout retirement and will make a big difference to whether you enjoy your golden years or struggle for the rest of your life. Are you newly retired? What tips do you have that has led to a successful retirement?

 

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