Retirement is a milestone it's easy to get excited about -- especially if yours is coming up very soon. But it's also important to go into retirement nice and prepared. So if you're within three months of closing out your career for good, here are some key moves worth making.
1. Get an estimate of your monthly Social Security benefit
Social Security could end up being an important source of retirement income for you, not to mention a steady one. And that's why it's important to know what monthly benefit you're looking to collect.
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Finding out what Social Security will pay you each month is easy. Just check your latest earnings statement for your estimated monthly benefit. And if you don't have a copy on hand, create an account on the Social Security Administration's website and access it there. (Note that if you're retiring before age 60, you may never have received one of these statements in the mail, since they generally only go out to those who are 60 and older.)
One thing to keep in mind is that you can't file for Social Security until age 62, and filing prior to full retirement age will result in a reduced monthly benefit. So if you're retiring at, say, age 60, you'll need to wait before those benefits become available to you.
2. Figure out how to manage your nest egg
Hopefully, you'll be bringing some savings with you into retirement. Whether it's $250,000 or $2 million you're sitting on, it's important to manage your nest egg strategically.
First, establish a withdrawal strategy so you know how much money you can safely remove from your retirement accounts each year without running the risk of depleting your savings prematurely. Next, make sure your savings are invested appropriately for retirement. That could mean shifting over to slightly safer assets if you're still heavily loaded on stocks.
3. Make a plan for healthcare coverage
A lot of people get health insurance through their employers. Once you retire, that probably won't be an option, so you'll need to figure out what your healthcare coverage will entail -- and how much it will cost.
If you're retiring at age 65 or later, you'll be eligible to enroll in Medicare right away. But if you're younger, you'll need a backup plan. That could mean hopping onto a spouse's plan if they're still working and you have that option. Or, it could mean paying for a few months of COBRA, which will allow you to retain your old workplace plan. This option may be appropriate (albeit costly) if you're retiring at age 64 and just need to tide yourself over for a short while until Medicare becomes available to you.
Either way, make sure you know how you'll be getting coverage and how much of a strain it will put on your income. Healthcare tends to be one of retirees' biggest expenses, so it's important to know what you're in for.
As you get ready to make your retirement official, take the time to tackle these three moves. They could set you up for success as you enter this new and exciting stage of life.
