5 achievable New Year’s resolutionsPosted on January 2, 2019
Save more. Lose weight. Start exercising. Sound like familiar New Year's resolutions? Ones you make every year that you might not have kept? Instead of biting off more than you can chew, how about resolving to take easy-to-achieve steps that have the potential to significantly improve your financial security and quality of life in retirement?
If you're a boomer approaching your retirement years, here are five important retirement planning tasks you can work on in the next few months.
1. Create your retirement bucket list
Define for yourself what retirement means to you. What do you really want to do with the rest of your life? What will make you happy? What are your answers to the "who-what-when-where-why" retirement questions?
You'll fare best in retirement if you plan a compelling life to "retire to" rather than focusing on "retiring from" work that you don't like.
2. Estimate your Social Security benefit at different starting ages
For most boomers, Social Security benefits will be your largest single retirement paycheck. It's the one source of retirement income that meets the most financial goals, compared to any other retirement paycheck.
As a result, it only makes sense to optimize the value of your Social Security benefits. The age when you start your Social Security benefits is one of the most important retirement planning decisions that most boomers will make.
You can learn about the benefits you can expect from Social Security by setting up a "my Social Security account" on the website of the Social Security Administration. You can check your earnings history and see how delaying the start date of your benefits can increase your Social Security income.
Once you estimate your retirement income at different starting ages, you can use popular Social Security planners that help you determine the best claiming strategy for your circumstances. Two popular free, online planners are the Social Security Retirement Calculator and Open Social Security.
3. Determine when and how you will retire
When you retire is the single most important retirement planning decision you can make. For instance, a 62-year-old could increase his or her ultimate retirement income by more than $30,000 per year – a 72 percent increase – by delaying retirement from age 62 to age 70. Of course, you don't need to wait until age 70 to retire – delaying retirement by just a few years can also result in significant increases.
Most older workers face tough choices: whether they want to work longer, reduce their standard of living in retirement, or try some combination of the two. Understanding the impact of your retirement age on your retirement income will help you make these tough choices.
4. Decide whether you will work part time for a while in retirement
Some boomers may decide they need to work for a while in their retirement years. If that describes you, you might want to explore different ways you could continue working. Learn more about the steps you might take to make sure you can continue working.
5. Think seriously about where you will live
Many boomers may need to reduce their living expenses in retirement in order to stay within their budget. Housing is usually the largest expense for most retirees, so that represents the biggest potential target for reducing your living expenses. You might be able to create win-win housing solutions by finding communities that not only allow you to reduce your living expenses but also create opportunities for important social connections and exercise.