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Coming late to the game: Easy retirement steps for late planners

So you’re on the verge of retiring and you haven’t even started planning. Here’s a short and easy list of steps to take to help you get started and put your mind at ease.

Calculate your assets. Even if you haven’t saved much, take a few minutes to add up what you do have: pension, 401(k), savings account, investments, mattress money, etc., and roughly project how much you think it will grow by the time you retire. It may not be much, and could be a cold dose of reality, but you’ve got to start somewhere.

Take account of your expenses. Over the years you may have become quite sophisticated with managing your money and haven’t had much to worry about. Online and automatic payments from your checking account help you manage things and now that the kids are out of the house, you’ve got a little extra income. Well, you’ve got to consider that this may all change significantly when you retire because you may have a lot less income when you stop working. So, it makes sense to take account of what you’re planning to spend when you retire and whether or not you’ll have the income to pay for all the traveling, entertainment and hobbies you’ve been looking forward to enjoying. Take a fresh look at the ledger and reassess what will be truly viable when the time comes to sit back, relax and soak in the sun.

Make some choices. After you’ve taken a hard look at what you can or cannot afford to do after you retire, you should determine what your priorities are and make a budget to guide you through the years to come. Times have changed and you just may not have the financial resources you once had anticipated having, so it’s important to accept the limits and to plan your future spending accordingly. If you still have a few years before the big date, you can also cut back on spending now and save a little more for later. Like many others are doing today, you may also want to consider postponing your retirement a few years to get the full benefits of Social Security and to save a little more before you call it quits for good.

Plan for the unplanned. Over the last decade or so, many of us have been taken by surprise by an assortment of unexpected circumstances. So, make sure you consider setting a little aside for emergencies within your monthly or annual budget. It never hurts to put away for a rainy day—even in retirement. Having enough set aside to cover at least three to six months of your expenses ought to get you through almost anything.

Consider your investment portfolio. Now that you are on the verge of retiring, the same investment strategy you’ve been taking during the accumulation stage may not be the optimal one after retirement. Since you’ll be partly dependent on these assets going forward, it is wise to consider taking a more conservative approach. You can’t afford to take the same risks to grow your assets as you once did, so maybe it’s time that you shift gears to ensure the smooth ride you’ve been looking forward to all these years. In addition to shifting assets with preservation in mind, you should also consider how you can make those assets a little more liquid and flexible, just in case you need them unexpectedly.

Consider your health. Being aware of your health is vital to enjoying a successful retirement. More than ever, healthcare provisions and costs will play an important part in your life. Medicare offers some great benefits to retirees, so make sure you apply on time if you are planning to take advantage of it—applying late can result in delayed benefits and higher premiums.

To downsize or not to downsize? This is the question that many retirees are asking themselves, one that is not necessarily an easy one to answer amidst an economic downturn. The fact is that the value of your home may not be what it used to be, so a sale may not be the most prudent action to take right now. On the other hand, a smaller house might afford you lower taxes, upkeep and utilities. You should weigh the pros and cons carefully.

Don’t be afraid to seek help. There are plenty of resources out there, both online and in your community that can help you better understand what you need to do to be ready for your retirement. Qualified financial professionals work with people in all stages of retirement planning and can help you answer some of the questions you may have.

Create an estate plan. Now that you’ve taken a good and hard look at what you’ve got to get you through the next part of your life and you have a better understanding of your assets overall, don’t forget to review or create your will or trusts with an estate attorney to ensure the security of your loved ones.

This material is for informational purposes only. Neither New York Life nor its agents provide tax, legal or accounting advice. Please consult your own tax, legal or accounting professional before making any decisions.

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