The decision to retire isn't an easy one. After all, there are pros and cons to leaving the workforce and embarking on this new chapter of life. If you're thinking of retiring in 2021, be sure to answer these questions before making that call.
1. Am I happy with my savings balance?
A recent survey found that Americans in their 60s have a median retirement savings balance of $596,992. You, on the other hand, may have a lot more money than that, or much less. But rather than worry about how your savings balance compares to others your age, think about whether the amount you've socked away is enough money for you. Will it cover your anticipated living costs? Will it be enough to help you achieve your retirement goals? And is it enough to help you sleep at night without having to worry about money? Make sure you're content with the sum you've saved -- and if not, you might consider working a bit longer to boost your retirement account balance.
2. Do I have a plan for claiming Social Security?
You're entitled to your full monthly Social Security benefit based on your earnings history at full retirement age. If you were born in 1955, full retirement age is 66 and two months, which you may be reaching this year. However, you don't have to claim benefits at your precise full retirement age. You can sign up as early as age 62, albeit at a reduced benefit, or you could delay your filing until the age of 70 and score a higher benefit in the process. There's no right or wrong answer when it comes to signing up. The key, however, is to assess your choices and understand the implications of claiming Social Security at different ages.
3. Have I figured out my health coverage?
Once you turn 65, you'll eligible for Medicare. But if you're planning to retire before age 65, you'll need to figure out what you'll do for health coverage. You could opt to retain your former employer coverage for up to 18 months under COBRA, which could bridge the gap between when you retire and when you're allowed to sign up for Medicare. But COBRA can be costly. Either way, make sure you have a plan for health insurance, because it's something you really shouldn't even think of going without.
4. Do I know what I'll do with my time once I'm no longer working?
Retirement can be a shock to your system, especially if you maintain a full-time work schedule in the months leading up to it. Before you make the decision to bring your career to a close, make sure you know how you'll spend your days. Your options here are virtually endless. Maybe you'll volunteer at an animal shelter, help care for your grandchildren, travel, or turn your woodworking hobby into a small business. Make sure you'll have enough to do to stay busy so you don't wind up feeling bored, restless, and unfulfilled.
You may decide that 2021 is the perfect time for you to retire. But before you make that choice, be sure to tackle the above questions. That way, you can kick off your retirement secure in the knowledge that you've really thought things through.