As you approach retirement age, reviewing your financial situation is a good idea even if you think you’ve got everything squared away. It’s always possible there could be changes in your assets, family situation, or personal plans. If you think there’s no way you’ll ever afford retirement, a review is still a good idea. You may be surprised to find that you have more options than you think.
1. Finding Assets
You may have more assets than you realize. If you are planning to downsize your living situation, you may want to look to how much you can expect to sell your house for. There may be assets in unexpected places as well, such as your life insurance policy. People often assume that their life insurance policies will only pay out to beneficiaries after their death, but yours may have cash value, and if you no longer need it, you can sell it to a third party. This often nets you significantly more money that you would get from surrendering the policy.
If you are at least 65, have had a policy for at least two years and your coverage is a minimum of $100,000, you may be eligible for a life settlement. If you have a terminal illness, you might be eligible for what is known as a viatical settlement. Even if you aren’t ready to sell just yet, it’s a good idea to know the cash value of your life insurance policy, and you can review a guide that explains how to determine this. In addition, make sure to take stock of any investments that you have.
2. Social Security
How much are you entitled to get in Social Security after retirement? You can visit the government’s Social Security website to get an estimate of what your benefits will be. Notice that while you can retire at 62, if you delay until you are 70, you will get the highest benefits. There are also a few other things to consider when it comes to Social Security.
Even if you are divorced, you might be able to draw on a portion of a spouse’s benefits instead of your own if you were married for at least 10 years, never remarried, and the portion you would get from them is higher than your own benefit would be. You might also be able to draw on a spouse or ex-spouse’s benefits after their death. Be sure that you thoroughly understand the various social security parameters in estimating your eligibility.
3. Retirement Accounts
There are many ways to earn money for retirement but whether you have a pension, a 401(k), an IRA, or a different type of retirement plan, it’s worth reviewing your most recent statement to see where you are. In some cases, depending on your age, you might be able to contribute more. In 2023, if you are 50 or older, your contribution limit for an IRA is $1000 higher than if you were under 50. Another reason to look at these accounts is that you might want to revise your investment strategy. While convention wisdom says that you should be more conservative with your investments as you get older, some people may want to take a few more risks.
4. Future Plans
After taking stock of your financial situation, you can realistically consider your future retirement plans. You might find that for more financial security, you need to work for longer than you originally planned. On the other hand, you might be fine financially, but you still want to stay in your job a little longer. You may revise what you want to do. Maybe you’ll want to move to an area with a lower cost of living.
Article Submitted By Community Writer
