If you're gearing up to retire in 2024, then that's probably not a decision you made on a whim. Rather, it's likely that you've spent your entire career plugging away, and as a result of careful planning, you're finally getting toward that home stretch.
You may be truly excited to embark on a new, exciting chapter of your life at some point in 2024. But if you're serious about retiring in the new year, then you should definitely do your best to make these important moves in the next bunch of weeks.
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1. Get an estimate of your monthly Social Security benefit
The amount of money you get from Social Security each month shouldn't come as a surprise -- not when there's an easy way to know how much income you're in line for. All you really need to do is access your most recent earnings statement and see what your monthly benefit is estimated at.
If you're 60 or older, you should know that those statements get sent in the mail -- so check your files to see if you have your most recent one. If not, you can create an account on the Social Security Administration's website and access that information there.
2. Figure out how much annual income your savings will give you
Maybe you've managed to save $400,000 for your retirement. Or maybe you're sitting on $800,000 or more.
No matter what your savings balance looks like, now's the time to figure out how much income it actually translates to on a yearly basis. That way, you can take that total combined with Social Security and make sure it's enough.
Now to know how much yearly income your savings will provide, you'll need to figure out what withdrawal rate you'll use. Experts used to suggest a rate of 4%, but that may be a little aggressive, especially if you expect to have a longer retirement.
It's a good idea to sit down with a financial advisor and figure out what rate is best for you. Then, run those numbers to get a sense of what your initial retirement income will look like.
3. Make sure your investments are appropriate for your circumstances
It's a good idea to invest heavily in stocks when you're in the process of building up a nest egg. But when you're on the cusp of retirement, it's a good idea to shift over to less risky, volatile investments.
The reason? Once your career concludes, you might immediately start tapping your nest egg and liquidating investments to cover your bills. So you'll want to make sure that at least a decent chunk of your portfolio is in vehicles like bonds, which tend to be a lot less volatile than stocks.
You should also make sure that a good chunk of your nest egg is in regular old cash. A good bet is to have enough cash to cover one to two years of expenses. If you have a very old home, though, then you may want to add a little more if you expect to have a lot of repairs to cover.
Retirement is an exciting period to look forward to. If that's your plan for 2024, use the next four weeks or so to tackle these key moves so you can approach that milestone with more confidence.
