Preparing for retirement can be overwhelming at times. This is especially true now due to COVID-19 and all the changes that have come with that. However, this process doesn’t have to be stressful if you prepare ahead of time and move forward with a game plan. Here are five things you should know if you’re retiring in 2022.
1. What your health insurance will be
When you retire, you will likely need to transition to Medicare. Medicare is a health insurance program run by the federal government. It is meant for those 65 and older and some people under 65 with a qualifying disability or health condition.
The Medicare program has multiple deadlines to know when you first enroll. It’s good to do your research ahead of time, so you don’t run into any surprises. Here’s what you need to know about your Medicare enrollment in 2022: boomerbenefits.com/retiring-in-2022/
2. How your financial plan might need to change
You’ll likely need to reevaluate your budget upon entering retirement. To begin preparing, you may consider creating an estimate for your income and how much money you expect to spend each month.
As a general rule, experts recommend you follow the 50/30/20 rule before you retire. This means 50% of your monthly income goes towards essential spending, 30% is for additional or extra spending, and the last 20% goes towards your savings.
Additionally, having an emergency fund is just as crucial during retirement as it is when you are working. By building up an emergency fund for retirement, you can help prepare for unexpected costs and protect your everyday savings.
3. When you’ll be taking Social Security benefits
It’s important to think about when you’d like to start receiving your benefits to plan accordingly. The earliest you can start your Social Security retirement benefits is at age 62, with the latest being 70. Some people choose to sign up immediately, while others prefer to wait.
If you sign up for your Social Security benefits before your Full Retirement Age (FRA), your benefits will be decreased. However, if you wait until you reach your FRA, you will receive your full benefits. The year and month you were born determine your FRA. For example, if you were born in 1958, your FRA is 66 and 8 months.
4. What your long-term needs are for housing
It can be helpful in the long run for you to consider what living arrangements may be best for you as you age. For example, if you plan to move to a new home, you might choose a home with no stairs to make things safer. Or maybe you decide to move close to your family or friends to have them close by as you grow older.
You may also find it beneficial to have a long-term care plan set in place if the time comes. Doing so can help alleviate your own stress and whoever is assisting you, such as your children. A long-term care plan can include home care, adult homes, nursing homes, etc.
5. How you will spend your time
When you retire, you will likely have more time on your hands. If this is the case for you, it can be helpful to think about what you’d like your schedule to be. For example, some people choose to create more travel plans with family and friends. Others might volunteer three times a week or start a new hobby. There are plenty of options, but the important thing is to pick something you enjoy!
Retiring in 2022 may look a little different compared to other years. However, you can help make the transition to your Golden Years easier by preparing ahead of time.