About to Retire? Here’s How to Prep

Are you about to retire? Here’s how to prep. So as I was preparing for this segment, I couldn’t help think of my preparation days when I was flying. When I turned 19 years old, I ended up getting my Pilot’s license, buying a share of a 1972 Piper Cherokee 140. A little four seater, low wing aircraft. And because I had share of it, I could pretty much fly whenever and wherever I wanted to. One day I decided hey, it’s time to go across the country. And so I headed for northwest Iowa. And as I was prepping and talking to my Flight Instructor and going through all of the things we needed to prepare for on this long flight and mapping everything out. I mentioned to her, hey, I just got a present from my parents. It’s a GPS. And this GPS is supposed to be able to help you, okay? It’s 25 years old here. And so as I was flying, the weather kind of came down. It was a hot summer day and all of a sudden I was at about 2000-2500 feet, just below the clouds. The rule was, I had to be able to see the ground in order to fly. Well on that windy day I ended up being blown off course. And so that map that I was using, okay, as I was flying across gives you water towers in different cities and different landmarks on the ground that you are tracking. So I flew down, put myself where I thought I was and realized I didn’t know where I was. So I took this out and I started figuring out how to use this. And I put in my destination and I put go to. And as soon as I did that and as soon as I saw that, I realized that I was about 20 miles off course. And because I was 20 miles off course, I had to make a change. And so if I hadn’t prepped with that GPS, if I had another in my airplane bag there, who knows what could have happened. So how do we help you prep for retirement? Here’s a list of nine things and I’ll have one at the end as a bonus. First thing, let’s do a good financial review. I might call it a red flag review of your financial plan. What you want to look at: income, investments, tax planning, health care and estate planning. Do a red flag review of those and see how you might match up with what you’re trying to accomplish in those areas. The next thing is you know you want to create a budget. What are my contractual lifetime income sources over here? What are my fixed expenses? And what are my fun expenses? If you have an idea of how much you have to spend and then how much you want to spend, that goes an incredible long ways when we come into these long-term planning tools that we use a lot. The next thing is to maximize your retirement savings. Remember, you’re preparing for the best adventure of your life. So as you prepare, you know if you’re saving, that means you’re not spending more than you’re making. And if that’s the case, you’re going to be already prepared as you get into retirement. Right now in 2024, the 401K max contributions $23K and then if you are older than 50, you get up to $30,500. If you’re thinking IRA or Roth IRA contributions, right now it’s $7K per person and then again, if you’re over 50, you can get up to $8K as a contribution limit. The next thing is pay off as much debt as possible. You know as you get into retirement, the less debt that you have, you know the stronger of a position that you’re going to be in. Plus, the old adage is you know the borrower is slave to the lender. So let’s get rid of any of those kind of headaches and free yourself up. The next thing is to look at your Social Security options. You can start at 62. You can go all the way and wait until you’re 70 years old to start Social Security. And so there are a ton of tools out there to help you analyze it. Obviously, that’s what we do all of the time. And so if you ever questions and you want to get a second opinion, if you need a co-Pilot in your plan, obviously give us a call. The next thing is to look at in how you’re going to prepare for health care. Usually you go through three different phases. You have your employer plan, their taking care of it. If you retire before you’re 65, now you have potentially marketplace health insurance and so there’s a lot that you want to deal with there. And then once you get to 65, then you’ll have Medicare. Sometimes people have options for Health Savings Accounts and they’re just not utilizing that. So that’s something really good to look into. The next thing is to manage your investments. This is really simple. Identify your risks and identify what you’re doing about your risk. If you don’t know the why behind your risk, it’s time to drill down and figure that out. And figure out what markets are giving you as options right now. Because there are a lot of really good solid options out there right now. The next thing is hey, you decide on a location. Where do you want to go? What do you want retirement to look like? Is it going to be warm? Is it going to be with family? Is it just going to be packed with activities? Put that on your list. Number nine there, plan out the activities that you might want to do. Okay, so you can make your little bucket list and then you can make those dreams come true. And then finally, the bonus. They say you have about 1,000 minutes per day. So I would take two minutes in your day, start with one thing that you’re just going to let go of. Start with one thing that you’re thankful for, what you’re grateful for and then finally finish with one thing that you are just looking forward to. I hope you enjoyed that segment. Have a great day.