Like everything else in life, planning your retirement is not something that you can accomplish overnight. In fact, it might take you several years to prepare everything, particularly when it comes to the organization both financially and mentally. Having a clear plan that you can implement is something that can help you, especially if you do not have children who can help you with everything.
So, that is why you might consider this article extremely useful. The text below will feature some steps that you should take when planning for your retirement, as well as some things that you should specifically consider. So, let’s take a look at the things you should know and consider:
1. Assign Someone The Power of Attorney – But Choose Wisely
One of the first things you will want to do is to assign the power of attorney. This can ensure that your finances are properly managed, especially if you cannot make decisions for yourself. The person that has this title can manage your money when you cannot.
When selecting who will be your power of attorney, ensure that it is a person who you completely trust and someone who knows what your needs and desires are. For example, a lot of people choose their spouses, but, if you do not have a spouse, you can appoint one of your children or your bank. The person you choose should take care of all your bills and insurance claims, as well as take care of maintaining your home when you cannot.
2. Write a Will
Whether you have a large family or no immediate family, one of the most important things you should do is write a will – even if your retirement is several years away. Hence, you should state how you want your property to be distributed, as well as to whom, state your burial wishes, as well as who should take care of your pets – of course, if you have any.
Keep in mind that different states have different regulations for writing a will. For instance, some allow it to be handwritten, while others do not. Another thing that you should keep in mind is that the person that you picked as your power of attorney will be the one who will execute your will, which is an additional reason to carefully chose one.
3. Consider All The Options You Have For Retirement Plans
There are various retirement plans that you can choose from, however, the most common ones include:
– An Employer-Sponsored Plan – a lot of experts stated that the plan provided by the company is the best investment since everything is already crafted and taken care of. But, before you opt for that one, ensure that you check with your lawyer about what it entails and what it will provide you with once you are retired.
– An IRA – although you might have chosen a plan that was offered by your employer, you should also consider other options when it comes to saving for your retirement. Keep in mind that you can opt for both options, which means that you are not restricted to one particular plan.
– A Provident Fund – you probably did not hear about it, but a provident fund is a fund that will allow you to have a retirement plan, a fund scheme, and an insurance scheme. If you opt for a provident fund, a small part of your monthly salary will be deducted and put into the fund. If you want to learn more about this fund, you can read this guide for more information.
4. You Should Also Choose a Medical Proxy
A medical proxy is an individual who has the legal authority to decide on your health care when you cannot do it yourself. This means that they will be responsible for deciding various things including whether you should be placed in a nursing home or, for example, they can also sign any documents that will allow doctors to perform surgeries or other procedures on you.
Now, this is why you should, again, choose carefully and wisely. If you entirely trust the person you have chosen as your power of attorney, you can name them to be your medical proxy as well. If you do not want to put more burden on that person, choose your child, sibling, cousin, or friend that will have your best interest in heart.
5. Think About Long-Term Care
Facilities that offer long-term care are getting more and more expensive every year, and this is why you should think about it when you are preparing for your retirement. If possible, you can apply for Medicare which can help you pay the cost of the long-term facility stay.
If you haven’t saved enough money, you can apply for a long-care insurance policy for you and your partner. The insurance will help you pay for the costs of this particular health care option, especially since Medicare might not cover everything. Hence, when calculating the cost of long-term care, ensure that you have enough to cover it.
6. Downsizing Might Be a Good Option
If you still live in a big house, you should consider downsizing, especially if your children moved away a long time ago or if your spouse is no longer alive. You should also think about how much does it cost to live there now and compare it to the cost of living in a different location or in a different home/apartment.
You might determine that it is cheaper to live in a different state or city, as well as sell your large house and purchase a small one – especially since this will cut your living costs. However, you should also keep in mind that it will be easier for you to maintain the home if it is smaller, especially since this can become harder as you age.
As you can see, there are various steps that you should take, as well as various things that you should consider when planning your retirement. So, now that you know everything you should think about, do not waste any more time, and start carefully and wisely planning your retirement right away!