Retirement is not the same as it once was. In previous years, people would work extremely hard during the beginning years of their life. Once they reached retirement age, they would retire and live out their life dreams, all in a comfortable financial situation. Today, however, retirement benefits are harder to receive. The amount of benefits that you receive may not be enough to cover your monthly expenses. In fact, nearly half (49%) of boomers still working say they do not expect to retire until they are 66 or older, including 1 in 10 who predict they will never retire. (Gallup, 2014). How can you begin preparing for retirement and ensure that you will have the ability to enjoy life after retirement?
Utilize company retirement account
Most employers offer some type of a retirement or savings account. Some employers may even match this account, up to a certain percent. If you have the ability to directly deposit a portion of your paycheck into a retirement account, take advantage of it. It is also important to contribute up to the full amount that can be matched. This is essentially, free money. Do not give it away. When you set up a direct deposit into your career sponsored retirement account, you will not be tempted to first spend that money.
Contribute to an additional retirement account
Unfortunately, contributing to a company sponsored account, even one that is matched, for your entire working career may still not be enough to comfortably live throughout retirement. Set up an additional tax benefited retirement account and regularly submit funds into that account, as well. The good thing about this account is that you can pull from it if you experience an emergency before retirement. If you do not pull from it, however, you will quickly grow your balance with compounding interest and market returns.
Plan for health and life insurance
It is likely that you have a work provided health insurance policy while you are working. However, once you leave the company, you are no longer insured. A lack of health insurance is one of the common reasons for staying at work beyond the retirement years. Planning for after work life and health insurance can ensure that you are covered, even during retirement. Government sponsored plans, like Medicare, can be helpful during this time. Medicare Fall Open Enrollment occurs from October 15 to December 7 of every year, and coverage starts January 1 the following year.
More information about Medicare can be found from the Medicare company website. The policies differ, depending on specific needs. Some Medicare insurance policies may even offer affordable term life insurance, in addition to the health benefits. Choosing a health plan that works for your specific medical needs is the best financial option. In 2013, 39.7 million Americans were enrolled in Medicare. In 2015, 55.7 million people were enrolled. Experts predict that by 2030, there will be 81 million enrollees. (The Commonwealth Fund, 2015). The Medicare program is a crucial one for retirees.
Set yourself up for financial freedom
Another way to ensure that you are comfortable retire when the time comes is to set yourself up for financial freedom. Attempt to pay off your home, car loans, and any other debt, before retirement. The more that you can reduce your monthly payment responsibilities, the more comfortable you will be. Attempt to free yourself from any and all monthly payments. You will find it easier to budget under your new retirement income.
Retirement used to be a thing that many working professionals looked forward to. Today, it is a stressor that many dread. They worry about their ability to make necessary payments and to carry health insurance during retirement. The dream of a comfortable retirement has been dissolved for many. There is still an ability to live the dream of retirement, if you plan properly. Always contribute to work sponsored retirement accounts, open up an additional retirement account with good market returns, consider health benefits like Medicare, and set yourself up for financial freedom.