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Published: July 26, 2021

Category: Educational, Retirement Planning

Our whole lives, we have been having to ask ourselves hard questions: what do I want to do for a living? Where do I want to live? Do I want to get married and start a family? Now, as you or a loved one approaches retirement, there are different questions you need to ask:

  • How much money do I need to retire?
  • How much will I pay in taxes during retirement?
  • How can I apply for my Social Security benefits?
  • Can I retire early?
  • What changes do I need to make so I can retire comfortably?
  • What are the available retirement incomes for me?
  • Should I downsize?
  • Do I want to spend my savings on myself, or leave it to my beneficiaries to inherit?

In this article, we will cover these questions that you should be asking yourself, and how you can find the answer. Let’s go ahead and get started.

 

How much money do I need to retire?

The short answer is: it really depends on you. The slightly longer answer: it’s dependent upon what you want to do. The best way to start answering this question is to consider how much you’ve made while you were working, and how much of that has been put toward savings. Then ask yourself about how much you plan on spending during retirement.

 

You can meet with a financial adviser to determine how much money you need to be able to comfortably live your desired lifestyle once you retire.

 

How much will I pay in taxes during retirement?

The best person to answer this question is a tax professional. However, there are a few taxes that you can prepare to pay. These are your 401(k) and Roth IRA payments. Once you begin collecting your 401(k), it becomes an income. This is subject to being taxed because your previous contributions to it were made with pretax dollars. Your Roth IRA payments may be taxable if you’ve not had the Roth for five or more years, as well as if you’re under 59 and six months.

 

How can I apply for my Social Security benefits?

Applying for your Social Security benefits is easier than a lot of people might make it out to be. To do this, you must first determine whether you are eligible. Then, visit the Social Security Administration’s website and click on “Retirement.” The page will immediately take you to an application that can be submitted online.

 

If applying for your benefits online doesn’t seem appealing, there are other ways in which you can do it. You can also apply by telephone, by calling SSA at 1-800-772-1213, or you can visit your local Social Security office and fill out the application in-person.

 

Can I retire early?

Well, let’s think of it this way. Depending upon how much you’ve worked and contributed to your 401(k) (or 403(b)) and Social Security, it’s possible that you may be able to retire early. But instead, you really need to be asking yourself, should I retire early? And that answer is up to you. Let’s circle back to having a financial adviser. Your adviser can run through/calculate the possible scenarios you could confront. We suggest meeting with one so that you can speak with him or her about what may be in your best interest.

 

If you do not currently have a financial adviser, let us help you get started. At The Best Senior Services, we specialize in connecting seniors to local licensed agents to ensure that they are making the best decisions for their financial future.

 

What changes do I need to make so I can retire comfortably?

A lot of what “retiring comfortably” means is to be financially stable when it is time for you to retire. One way to work toward this is to budget. Figure out the little things you can go without buying. Maybe if you get a cup of coffee every day, or you buy dessert snacks when you go to the grocery store, you could cut back on how often you consume these things.

 

It also helps to increase your cash flow as much as you can. If you are still under your company’s benefit plan, take a close look at the payment options that are available. Whichever will provide you the greatest amount of income that will provide assistance throughout your projected life expectancy. A second way to increase your income is to utilize a reverse mortgage. You can think of this as a way to make money while securing your home for retirement.

 

And, of course, retiring comfortably does not just mean you need to have financial stability. It also means you’re healthy and having fun. Eat healthier and increase your exercise amount. Indulge more in your hobbies, whether it be travelling across the country or collecting coins. You’ve earned your retirement — it’s now time to enjoy it.

 

What are available retirement incomes to me?

Well, in short, the answer is that you have quite a few of retirement incomes available. Most of them come from your retirement savings accounts: your 401(k), IRA, HSA and others that are designed to financially help you when you reach retirement.

 

It’s important that you understand when to use them. You can’t keep your retirement savings in your account for an indefinite period of time. According to the IRS, you “have to start taking withdrawals from your IRA, SIMPLE IRA, SEP IRA or retirement plan account when you reach 70 ½.” However, due to the changes enacted by the SECURE ACT, “if your 70th birthday is July 1, 2019, or later, you do not have to take withdrawals until you reach age 72.”

 

Should I downsize?

In this case, when we say downsize, we mean to move into a smaller home. Doing this could be beneficial for multiple reasons. When you downsize, you face the opportunity of lower mortgage and utility payments every month. The extra money you will be saving can go a long way toward other necessities or savings. Not to mention, smaller homes generally mean smaller maintenance. This translates into less rooms and square footage to decorate and clean. And, as you get older, this is a perk that is hard to ignore.

 

On the other hand, there could be some disadvantages to downsizing that you could possibly run into. If you love to host family and friends, the reduced space in your home could pose as a potential problem. This is especially apparent if you have grandchildren or other family members who are likely to spend the night when they visit. An additional problem you could face is storage costs. This depends solely on what you plan on doing with the extra things you have that don’t quite fit in your home. You have the option to sell, donate or trash, but if you don’t want to do any of those things, you will have to rent a storge locker and keep your things there. Depending on where you rent your locker, storage costs can be costly.

 

Do I want to spend my savings on myself, or leave it to my beneficiaries to inherit?

This may be one of the hardest questions you have to answer. To effectively figure this out, you will have to consider both you and your spouse’s needs and the needs of your beneficiaries.

 

Ultimately, the answer is up to no one else but you. On the bright side, there is no bad answer to this. Take your time when thinking about this and try not to rush any decisions.

 

There are a lot of other questions that you need to be asking yourself about retirement that haven’t been addressed by this article. Be on the lookout for similar articles like this that will address other questions you need to consider.

 

If you need further help on narrowing your answer down for the questions listed above, we would be happy to help you here at The Best Senior Services. We pride ourselves in providing seniors education about insurance and other financial services. We also love connecting seniors with registered agents that are local, so that seniors know they are working closely with someone who will prioritize their needs. You can get started with us today by visiting our website or calling us at 855.979.8277. We always look forward to hearing from you!