Pre-retirement Tips

Retirement can seem like a distant concept but at age 50, that quickly changes! 50 is a good time to get serious about thinking about what your retirement or senior years may look like. In your early 50s, you still have 10-15 years to implement a plan with a higher degree of success than if you wait until your 60s to tackle this.
Here are some tips specifically for anyone turning 50 or in their early 50s:

Join AARP. For $16, you and your spouse or significant other can obtain a membership. AARP will get you thinking about being a "senior" and introduce you to some money saving programs.

Take a serious look at your home and begin to assess whether it is the place you want to spend the rest of your life or if it is time to look at other alternatives. Certain types of real estate take longer to sell, so changes could take much longer to implement. Evaluate the livability and affordability of your castle through the lens of someone who will be getting older.

This is a great time to streamline your affairs. Consolidate accounts. Eliminate unnecessary aspects of your material world that will simply be a hindrance as you age. 

Get active. In our 20s, 30s, and maybe even for part of our 40s, we can cheat because our bodies are younger and more flexible. At 50, this changes and you will do much better during the second half of life if you develop an active life style.

Something as simple as a daily walk around the neighborhood could change your outlook for the better. 

Run a quick retirement check using this simple formula:  Modify your current household budget to adjust for anticipated changes in retirement. From your total monthly household budget subtract anticipated income from social security benefits and pensions. The difference is your "income gap". Now divide  your retirement savings by the "income gap" - this is the number of months you can fund your retirement without taking into account investment returns or additional savings. This is a crude test but can help you begin to assess your financial readiness.

If you don't keep a household budget, this step is absolutely crucial if you're not sure you can live comfortably on your social security and pension income. Start tracking your spending and do a budget BEFORE you retire so you can validate the figures you will be using for your retirement plan. For example, if you have no idea how much you spend on groceries and meals out, how will you be able to budget these items in retirement?

Much of the information in our financial services section is designed to help you with various aspects of your financial life and should be helpful in the pre-retirement phase of your life.

If you are planning to retire prior to age 65, get a handle on how you will pay for your health insurance until you enroll in Medicare at age 65. Health insurance is no longer as difficult an issue for early retirees given the new landscape under the Affordable Care Act. Careful planning in some circumstances can translate into having Uncle Sam pick up tab for a good portion of your health insurance premiums if your income falls within the lower end of the income guidelines.

Bad definition: Retirement - : withdrawal from one's position or occupation or from active working life.

Good definition: Life Transition - fill in your own definition!

Of course, if you hate your job, retirement may be something that you are eager for. Read the book "Get a Life..." by Ralph Warner for more insight into how to make this transition successfully.

For anyone contemplating living on the road, I highly recommend "From Camping to Full Time- Making the Big Jump" by Andy Baird.  And the Good Sam Open Roads forum is another invaluable resource for anyone seriously looking at spending a significant portion of their retirement in an RV type of a lifestyle.

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