Retirement is a time of great uncertainty for most people, especially if little thought has been put into planning for post retirement life. One of the biggest anxieties is whether your finances will see you through this phase of your life comfortably. Although almost everyone invests in retirement savings plans, the fear of running short of cash at this crucial stage in life still persists. One way to get rid of this fear is by evaluating your post retirement finances and saving up towards expected expenses right now.
Outstanding Debts
The first step is to take stock of your financial situation. Calculate the amount of debt, if any, that you will need to pay after retirement. Ideally, all your debts should be paid off well before your retire. See if you can make additional payments now so that you are debt free when retiring. If not, set up a fund that will take care of any outstanding debts once you retire.
Pensions
Evaluate the amount you will receive as pension. If your employer is required to pay you a pension, ask your human resources department to give you an estimate of what you will receive. Federal government employees can get this estimate from the website of the U.S. Office of Personnel Management.
Social Security
Ask for your social security statement from the social security administration. This will tell you how much you stand to receive post retirement. Remember that the longer you work, the better your social security payments are.
Medical Insurance
Make sure that you have sufficient post retirement medical coverage to meet any expenses that you may incur to keep you healthy after retirement. Getting insurance now, when you are in good health, means that you pay lower premiums for the same health benefits that may prove to be very expensive when your health deteriorates, making you a high risk customer for insurance companies.
Switch to Budget Spending Right Away
Make a monthly budget and stick to it. This will help you align your lifestyle for a more comfortable post retirement financial situation well in advance. A monthly budget can help you trim off a significant portion of your expenses and these savings can go towards your retirement fund. Budgeting also shows exactly where every dollar you earn is being spent, and this helps you decide which expenses are necessary and which you can eliminate.