Half our life is spent trying to find something to do with the time we have rushed through life trying to save.
Will Rogers, Autobiography, 1949
At some point you will realize it is time to officially retire. Today, many people are forced into retirement due to economic downturns while there are others who reach the age of retirement and choose to stop working. No matter what your reason is to retire, there are several factors and steps that must be considered.
Determine financial standing. This is the most important factor of retirement – answering the question “Can I survive on my income now?” Retirement income comes from savings, pensions, 401k and social security when you reach the proper age. A retirement calculator will help you determine the amount of money you will need each month to live within our means and help you discover whether or not you will have what you need for financial security in the future.
Consider additional work. If you are forced into retirement and unable to collect social security or other savings, you will want to find another source of income. By the time a person reaches retirement age, the options for work are slim. Choosing to partake in minimum wage jobs stocking shelves at the local store, mowing lawns in your neighborhood or picking up a newspaper route can offer the additional income a person needs to succeed in retirement.
Downsizing. Once the kids are grown and living on their own, many parents discover that the house they have lived in for many years is simply too big to maintain. Retirement is the most opportune time to begin downsizing every area of your life. This will allow retirees to live comfortably within their means and their abilities. Consider moving into a senior apartment complex or smaller home and turning your current home into a rental property for additional income. Many seniors also discover that they no longer need high end cable packages or other home amenities that were targeted towards entertaining the children.
Turn in a resignation. Before choosing to retire, speak with your employer regarding your options. Depending on the situation, you may be required to train a new person for your position before leaving. The appropriate time to give an employer for resignation is at least two weeks. If you currently are working a job that requires extensive skills training, a minimum of four weeks is a better option. This will allow the employer to find a replacement and generate a smooth transition as you end your time with their company.
Collect on retirement assets. If you are of age to collect social security benefits you will need to apply for them at your local Social Services office. You may also want to begin drawing money from your 401k and any bank savings accounts that you may have to help fund your retirement lifestyle. These earnings are taxed by the government as your income so it is also important to plan accordingly if you make above the $5,000 limit that prevents you from paying taxes. A stock portfolio manager will help you identify which assets are worth selling and which are worth investing more to also help you gain more money.