If you’re at the point where retirement is looming on the horizon, it’s time to determine if you’re actually financially ready to retire. Here are a few things to consider before you leave work behind.
If you track your spending and expenses or use a budget, you’re ahead of the game. If not, you need to start tracking your expenses over three to four months. There are plenty of apps and websites out there to help.
Once you’ve got these numbers, you need to project what these expenses will be like by the time you retire. For example, you won’t have your kids’ college education to pay for or your mortgage may be paid off by then. Or your travel and clothing expenses may change once you’re no longer working.
The next step is to add up your different sources of income from salary, any rental income, Social Security, etc. You can log onto the Social Security website to get a projection of what your payments will be when you retire. The website also offers various retirement calculators.
Hopefully, you’ve been saving for retirement for a few decades by now. (Or if you’re younger, now is the time to start saving!) The goal is to be able to withdraw around 4% of your retirement savings to live off of during retirement, that way you shouldn’t run out of savings in your lifetime. However, we recommend you speak to a financial planner before you start spending.
As with most things in life, you’ll need to adjust your plans along the way. Your spending and income may change over the years, as will your investments. If you’ve made these calculations early enough, you may need to adjust how much you’re saving and investing to reach your retirement goals. Again, a financial planner may be able to help you meet those goals.
WWFCU offers individual retirement accounts (IRAs), money market accounts and share certificatesto help you save for your retirement. Call (734) 721-5700 or stop by our branch to speak to a Member Service Representative about your savings and investment options.