Knowing when to retire can make a difference in a person’s financial strategy. Since every person is different, there are no set rules as to when a person is ready to retire. Financial planners may suggest that retirement requires specific amounts of savings and investments. Some experts advise people to retire at a set age. However, every individual needs to decide when retirement makes sense for their situation. One important thing is to refrain from quitting a job until a solid plan is created.
Retirees Must Have Income to Survive
Retirees need to have money so that they can pay their bills and enjoy retirement. Per the Bureau of Labor Statistics, the average retiree spends approximately $46,000 each year. However, a study conducted by the Bureau of Labor Statistics demonstrates that a typical baby boomer preparing for retirement only has about $150,000 saved up. This means that the savings will only last a little more than three years. After the money disappears, a retiree must then depend on Social Security income to get by.
Using an online retirement calculator may help people know whether they are ready to retire. A matching nest egg indicates that the person is capable of retiring without any financial stress. On the other hand, a person may not wish to retire if the calculator shows that they are far behind the required amount. In this case, working for several additional years can help a person save more money for their retirement. Another option is to make adjustments enabling a more affordable retirement. For instance, the person can sell a larger home and buy a small house or give up a luxury apartment and move into a humble abode.
Find Affordable Healthcare Coverage
Medicare Part B is not free. The average retiree on Medicare will pay approximately $145 per month in 2020. Many people will receive Medicare Part A at no additional cost. However, Part A and Part B have mandatory deductibles. Plus, Part D, which provides prescription drug coverage, costs additional money each month. One option is to enroll in an affordable Medicare Advantage Plan that includes Part D, gym membership and other additional benefits. Some Medicare Advantage Plans are available with no monthly premiums.