Retirement may be one chapter of life you’re really looking forward to. You may want more time with family, opportunities to travel, or a chance to finally tackle the projects and hobbies you’ve been putting off.
Getting there takes more than choosing a retirement date, and how you prepare for it now can shape what that chapter looks like for years to come. You’ll need to make decisions about your savings, Social Security, healthcare, and the expenses your retirement income needs to cover.
October is Financial Planning Month, which makes it a great time to check in on your retirement plans. Whether retirement is a few years away or right around the corner, these five questions can help you see what you already have covered and where to focus next.
Do I know what retirement will actually cost me?
Knowing how much you’ve saved is important. Knowing what that money will need to cover can give you a clearer picture of retirement costs.
Start with your expenses today and think about how they might change in retirement. Your commute and retirement contributions may go away, while healthcare, travel, or hobbies could take up more of your budget.
Sketch out a sample monthly retirement budget that includes:
- Housing and utilities
- Groceries and everyday expenses
- Transportation
- Healthcare and insurance
- Debt payments
- Travel, hobbies, and entertainment
- Financial support you expect to provide to family
Then compare your estimated expenses with the income you expect from Social Security, pensions, retirement accounts, and other savings. If there’s a gap, you’ll have a clearer idea of what you can work on before retirement.
When should I claim Social Security?
You can start receiving Social Security retirement benefits as early as age 62. But, claiming earlier means accepting a lower monthly benefit. Waiting until your full retirement age increases that amount. Delaying beyond full retirement age can increase your benefit further until age 70.
There isn’t one claiming age that works for everyone. Your savings, other income, retirement timeline, and monthly expenses can all help you decide what makes sense for your situation.
- If you’re considering claiming earlier, ask whether you’ll need Social Security income as soon as you retire and how a lower monthly benefit could affect your long term budget.
- If you’re considering waiting until full retirement age, think about whether your other income and savings can support you until then.
- If you’re considering delaying benefits longer, consider how you’ll cover expenses while you wait and how a higher monthly benefit could fit into your plan later.
Instead of relying on a general rule of thumb, run the numbers for your situation. Retirement Simplified, powered by Silvur can help you explore different Social Security claiming ages and see how timing could affect your retirement income.
Is my financial life ready for retirement?
Retirement planning includes more than your retirement accounts. Take a look at the financial commitments you expect to carry with you and how they fit into your future budget.
Ask yourself:
- Will I still have a mortgage, car payment, credit card balance, or other debt?
- Could my emergency savings cover an unexpected home repair, car expense, or medical bill?
- Am I planning a home renovation, new vehicle, big trip, or another large purchase around retirement?
- How does my current spending compare with the income I expect to have in retirement?
Seeing your full financial picture can help you identify practical steps to take now and make the transition to retirement feel more manageable.
Have I planned for healthcare costs before and after age 65?
Your healthcare plan will depend in part on when you retire, not just when you turn 65.
If you plan to retire before age 65
Medicare generally begins at age 65, so you’ll need a plan for health insurance if you leave employer sponsored coverage earlier. Research your coverage options and include premiums and other out of pocket costs in your retirement budget.
If you’re approaching age 65
Get familiar with Medicare before it’s time to enroll. Your Initial Enrollment Period generally spans seven months, including the three months before you turn 65, the month you turn 65, and the three months after.
Look beyond premiums. Deductibles, copays, prescription drugs, and services Medicare doesn’t cover can all affect your healthcare spending in retirement.
If you already have Medicare
Review your coverage each year to make sure it still fits your needs and budget. Medicare Open Enrollment runs from October 15 through December 7, making this a timely opportunity to check your coverage as you review the rest of your financial plan.
Could my plan adjust if retirement changes?
Your target retirement date gives you something to work toward, but life can change along the way. Test your plan with a few quick “what if” questions.
- What if I retire two years earlier than planned?
- What if I work another year or two?
- What if my monthly expenses are higher than I estimated?
- What if I decide to move or stay in Maryland instead of relocating?
- What if I help a family member financially?
You don’t need to predict exactly what retirement will look like. Exploring a few possibilities now can help you understand how much flexibility you have and where you may want to prepare for a change. You can also learn more about preparing for retirement and find additional steps to strengthen your plan.
Turn one retirement question into your next step
You don’t have to solve every part of retirement planning this October. Start with one question you couldn’t confidently answer. That could mean creating your first retirement budget, exploring when to claim Social Security, or getting a clearer picture of your finances today.
Small steps now can help you feel more prepared for what comes next. If you’re not sure where to start, schedule a free financial wellness checkup to review your budget, savings goals, debt, and other financial priorities with our team.
Choose your next step, put it on your calendar, and keep your retirement plan moving forward.
