Retirement Tips for Baby Boomers
While getting older comes with its fair share of downsides, the big benefit we all can look forward to is retirement. Although, these days even retirement is not as straightforward as it used to be. If you are a baby boomer and entering retirement, then you know that it is not as easy as you may have believed it would be. Do not despair, we have collected several tips for you and arranged them here.
1. Prioritize Your Financial Goals
When you are planning for retirement, it is important to remember that you will have a number of things that you want to accomplish during your retirement. These may range from vacations to paying off debts. Regardless of what your goals are it is important that you prioritize what you want to accomplish first. The best way to do this is simply make a list of your goals and decide what would be most beneficial for you and your family. While it may be tempting to save up money for a trip to Europe, it might be more important to save up enough to pay off the mortgage or pay for long term-care insurance. If you have a partner, be sure to consider their income and retirement as well. It might also be rewarding to help your children or grandchildren.
Giving a loved one financial independence is rewarding and fulfilling, but it is important to prioritize your own financial wellbeing. Our number one retirement tip for baby boomers is to make sure your own retirement needs are met first and foremost, as that will serve as the basis for your ability to do anything else in retirement.
2. Create a Budgeting Plan with Your Retirement in Mind.
Budgeting seems like something that we should not have to do unless we are struggling, but in fact everyone needs to budget, especially if your income is about to be reduced. If you are about to retire you should consider making a spending plan that will make sure your spending is aligned with your goals. If you are able to budget effectively then it is more likely that you can keep your preferred lifestyle as well as accomplish your retirement goals.
A spending plan will help you to make sure that you are not spending more money than you have available to you in savings and income. It will also help you to map out how to pay off any debts you might have left that could increase if you do not address. Budgeting also helps you to identify any extra savings that may help you with any tax advantaged accounts you may have such as a 401(k), IRA, and HSA.
The biggest benefit to a spending plan towards the end of your career and in the early stages of retirement is that you really see how much money you need to do the things you would want to do in retirement. A ballpark estimation of what you have might leave you short on some financial goals, or you might have more money than you thought and will not be able to capitalize on it.
3. Find Ways to Create Income During Retirement
There are several ways that you can earn some income after you have retired. The first step to this would be to figure out how much income you will need during retirement. The best way to do this is to follow the first two retirement tips for baby boomers which will help you to better understand your financial situation when entering retirement.
The next step is to determine whether or not your standard of living will be maintained or if you will require more or less. A general guideline is to initially target a 70 to 90 percent income replacement and adjust based on how much you think your lifestyle will change. If you plan on downsizing your house and selling some personal items, you will likely need less income. Conversely if you plan on spending more on traveling and buying a boat you may need to find ways to generate income.
Some options available to you include freelance, selling unneeded or unwanted items, or freelance. Another option may be a life settlement.
A life settlement is where the holder of a life insurance policy sells their life insurance policy to an investor. This allows people who are looking to cash out their life insurance policy to receive a significant amount more than the insurance company would offer. While there are some conditions that need to be met in order to be eligible for a life settlement it is generally the best option for those looking to cash out their policy. You need to be at least 65 years old and have a life insurance policy worth at least $100,000, which makes it a perfect option for retirement. If you meet these prerequisites, then a life settlement could net you as much as three to four times the amount of the typical cash out of the life insurance policy.
The main drawback to a life settlement is that while it is a simple process it takes time to receive the benefit. A typical life settlement process takes 90 to 120 days from application to receiving the benefit, however if you can afford to wait and if you qualify this is the most lucrative option available. If you are interested in estimating the value, you would receive from a life settlement you can try our estimator here.
A life settlement may not be the only way to increase your income during retirement, but it may generate a significant amount of money for you and allow you to enjoy the parts of retirement that you are looking forward to.
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