4 Things to Consider Before Retiring

For the thousand or so people who climb Everest every year, this once in a lifetime challenge is not done spur of the moment. They do not wake up one morning, decide to climb the world’s highest peak, and then find themselves atop it the next day. Such an ascent requires months, if not years of training and planning ahead. They practice, gather supplies, acclimate to the altitude, and bring a knowledgeable guide. Going in blind and unprepared would literally mean certain death.

In the same way, as you reach the pinnacle of your work life and see retirement on the horizon, it is essential that you approach that new peak prepared with a plan. Hitting that new transition blind could be devastating for both you and your loved ones, as we now see in the unfortunate cases of nearly 50% of Americans. These days, all too many people nearing retirement do not have a financial plan in mind, nor have they figured out which investments they will utilize first. For this reason, it is essential that you start planning for retirement sooner rather than later. To aid you in this, we will discuss some of the most important things you should consider before retiring.

Consider Your Budget

You should have a positive outlook on this new transition in life. That starts with accepting that it will happen and planning out a budget for this new period of your life. Even if you have a seemingly large enough figure in the bank, it is necessary that you thoroughly break down a budget and prepare for unexpected spending such as house repairs, hospital bills, insurance, and other such surprises.

While you can do this on your own, it is advisable you sit down with a Certified Financial Planner (CFP) for an expert opinion and comprehensive retirement budget planning.

  • Identify fixed expenses – housing, food, taxes, healthcare
  • Identify flexible expenses – gifts, clothing
  • List discretionary expenses – Vacations, travel, entertainment, meals out
  • Create an emergency fund that is at least 3-6 months worth of the monthly budget

Once you have settled all of these estimates, pair them to your savings and resources. Best case scenario your pension, annuity, and Social Security will cover most of these expenses with retirement savings covering the rest, including the expenses that are not necessary.

Consider A Reverse Mortgage

Financial literacy is important because it can help you consider multiple steps or measured approaches to this new and somewhat scary stage. If you find that you have not saved enough or grow worried that an emergency would cripple your retirement, you may want to consider a reverse mortgage. If you own your house and are 62 years or older, you can transfer your home equity into cash.

For those wondering how a reverse mortgage works, just know that you do not have to repay the loan as long as you are living in the home. This is perfect for those who want to increase their available financial reserves for retirement but do not want to make payments on loans.

Consider Eliminating Debt

As mentioned in our tips to reaching financial independence, If you have the ability to pay off credit card debts or any other such debts, it is critical that you do it as soon as possible, especially if you are within a decade of retirement. By paying it all down, you cut down on future worries, payments, and ensure that you will be cash positive once you stop working. Unbury.me is a fantastic app to help you begin digging your way out of debt.

Consider an Annuity

If you wish to have an immediate income-annuity, you can buy a pension using a portion of your savings. These purchase you a lifetime income that lasts as long as you’re living. While this requires sacrificing liquidity, it is something worth considering. A diversified portfolio is always a wise method for preparing for an uncertain future. Fidelity provides a variety of annuities so that you can guarantee an income and retire with confidence.


Retirement does not have to be a scary transition. In fact, with preparation, it should be one you anticipate. With careful planning, smart saving, and savvy financial movement, you too can reach that peak.

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4 things to consider before retiring

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