And although many Baby Boomers have seen great success during their years, a lot of them are facing some uneasy questions during the current economic recession.
As a Hampton Roads real estate expert who specializes in working with Baby Boomers, I want to help make your transition into retirement as worry-free as possible.
Continue reading to learn 10 tips for how Baby Boomers can prepare for retirement.
Attention Baby Boomers Living in the Hampton Roads, Virginia Area
Here are 10 tips that I recommend Baby Boomers follow to make sure they’re adequately prepared for retirement:
1. Estimate Your Retirement Income and Expenses
Before you officially retire, take the time to calculate how much money you spend each month on such items as food, utilities and more. You should also factor out expenses that you will no longer have after retirement – such as commuting costs.
Using those calculations, make a budget that you can follow once you are retired.
Make sure to set aside room in your budget for an emergency fund that can pay for three to six months worth of living expenses.
2. Decide When to Retire.
Once you’ve calculated your expenses, you should have a better idea of when would be best time to retire. When making this decision, consider the future rate of inflation as well as how many years you want to enjoy your retirement.
3. Consider a Second Career or Part-Time Job
Many Baby Boomers are having to dip into their savings account right now because of the current economic climate.
If you definitely want to retire by a certain age but don’t have the expenses to fund the kind of retirement lifestyle you want, consider finding a new career or working a part-time job.
4. Figure out when you’ll begin taking Social Security payments
When you decide to start taking Social Security benefits will affect how much your monthly payments are. For instance, if you take your benefits at 62 or 65, your payments will be lower than if you stay in the workforce longer.
Plus, the government raises the date you can receive full Social Security benefits annually.
Here’s how this breaks down:
- If you were born between 1946 and 1965, your full retirement age is 66
- If you were born in 1960 or later, your full retirement age is 67.
And if you’re married, experts recommend that the spouse that gets paid more money should not retire until at least 70.
The Social Security Administration’s Benefits Calculators can help you calculate the best age to retire at in order to maximize benefits.
5. Decide Where You Want to Live.
Studies show that the majority of Baby Boomers wish to stay in the same city they’ve been living in after retirement. But other Baby Boomers would prefer to move closer to their children or to a different part of the country.
Consider what your preference would be and then make steps accordingly.
And if you’re one of those Baby Boomers who would prefer to live in a new city, I recommend you check out the Hampton Roads real estate market. This area is well known for being senior friendly and has several retirement communities.
6. Pay off Your Debts
When you’re ready to enjoy your retirement, the last thing you’ll want is a bunch of debt hanging over your head. Especially since it will be even more difficult to pay off that debt post-retirement when your income is diminished.
Unfortunately, studies show that there’s been a sharp increase in seniors filing for bankruptcy. Avoid this heartache by paying off as much of your debt as possible before retirement.
7. Learn How to Navigate Medicare.
You never know when you’ll need the help of Medicare during your retirement. So learn as much as you can about this government program.
I also recommend that you purchase Medigap insurance – although make sure you understand how it works before you buy it.
8. Learn About Long-Term Care Insurance.
One thing you should know about Medicare and private insurance companies is that they often do not cover the majority of long-term care costs. These costs include nursing home care.
Thus, I suggest that you look into whether long-term care insurance is right for you.
Factors you should consider include:
- Your health
- Your family history of living in nursing homes
- Your budget
- Whether you want to leave money for your children
9. Expect the Unexpected
There is always the possibility that an unforeseen medical emergency may arise that is not covered by Medicare or a private insurance company. Prepare for those out-of-pocket medical costs by purchasing a high-deductible health insurance policy before you retire.
When you do this, you can set up a Health Savings Account that will accumulate funds for these emergencies.
10. Prepare Yourself Mentally and Emotionally for Retirement
Retirement can be an extremely enjoyable experience. But for a lot of Baby Boomers, the initial transition into a new lifestyle can be difficult.
Consider what your emotional needs may be when you ultimately decide to retire and make sure to address those needs.
Your Hampton Roads VA Real Estate Expert
If you’re a Baby Boomer considering retirement, I hope that my tips have been of some help to you today.
During my years as a Hampton Roads REALTOR, I’ve worked with dozens of seniors as they enter retirement and search for their next dream home.
While you’re at it, feel free to check out my helpful senior living resources, including:
- Questions to Ask Retirement Communities
- How to Select the Right Retirement Community
- Neighborhoods for 55 and Better
- And more!
Until next time,