What You Really Need to Know Before You Retire

After my husband and I moved to an age-restricted retirement community over a dozen years ago and I began writing a retirement blog, I thought I was completely ready when I decided to retire. After all, many of my friends were retired and I had done a great deal of research on the topic, including reading the articles which are mentioned later in this article.

While I was much better prepared than many people, I still encountered a few confusing situations. For example, although I had received estimates of my own Social Security benefits, I wasn't sure how much I was entitled to receive based on my husband's earnings. Would half of his benefits be more or less than my own benefits? Exactly how much money would I receive after I stopped working? We had already decided where we wanted to live and moved there, but we hadn't given much thought to how we would invest our savings in order to supplement our Social Security benefits. I also had given very little thought to exactly how I would spend my time after I stopped working. I certainly was not ready for the rocking chair and rest home!

This was just some of the information I realized I needed to know before I retired, and it recently struck me that many other people are probably in the same situation.

Below you will see my list of what you need to know BEFORE you stop working. You will also find links to books or other resource which I found helpful and which I believe will provide you with most of the information you will need to know so that you are as prepared as possible to make the best decisions for yourself.

Many people do not realize that there is more than one way to collect your Social Security ... and you have to make the decision BEFORE you begin collecting.

For example, you can collect based on your own earnings or you can receive up to 50% of your spouse's earnings. How much you receive depends both on the age you are when you collect and the age your spouse is when he or she begins to collect. For example, if your spouse begins to collect at age 62, he or she will receive much less than if they wait to receive benefits until they are age 67 or 70. If you are going to collect Social Security based on a portion of what your spouse receives, then the age when they begin to collect will affect you, too. In addition, if you decide to collect based on your spouse's earnings, you will receive a higher percentage of their benefits at age 67 than you would at age 62. The longer both of you work, the higher your income will be when you both stop working

The tough part about all of these options is that you need to know what you are going to do BEFORE you begin collecting. Once you have started receiving your checks, you cannot go back and say "I didn't know I had other options."

Because of that, I highly suggest you either order all the government brochures you can find about Social Security, or you should purchase a good book on the topic, such as the book listed below.

It is almost impossible to know whether or not you will have enough retirement income until you decide where you plan to live after you retire. Essentially, you have three choices:

!. Stay where you are. If this is your choice, all you need to know is how much it will cost you to continue living there.

2. Move to another part of the United States. In this case, you need to learn more about the advantages and disadvantages of the different states ... property tax rates, income tax rates, weather, cost-of-living, and the availability of the things you like to do.

3. Move to another country. There are many reasons why people choose this option. They may have relatives or other connections to another country; they may have always dreamed of living permanently in a place they visited in the past; or, the most common reason, they want to save money.

If you have decided to move ... either within the United States or overseas, I highly recommend that you read one of the books listed below. My husband and I used these as reference guides before we picked our retirement community in the U.S.

These are two books which we used when we decided where we wanted to retire. I still use them as a reference when I write my retirement blog. You are likely to find them helpful, too. While they do not talk about specific subdivisions or senior complexes, they do give helpful information about the various communities in the U.S. and overseas, so you can compare the ones you are considering.

Once you have chosen a city, state and/or country where you want to retire, you can then talk to a Realtor and do internet searches to choose the perfect community and home that fits your budget.

In addition to Social Security, many people have at least some money in a 401K or IRA. Once you know how much Social Security you will receive and how much your cost of living will be, you need to decide how to invest your savings in order to maximize your retirement income.

You may want to talk to an investment advisor, because there are many different options available ... including dividend stocks, annuities, mutual funds and bonds. Make sure you understand all your options clearly before you make any serious decisions.

If you are withdrawing money on an annual basis, most financial planners suggest that you do not withdraw more than 3 to 4 percent a year.

Your financial planner will be your best guide in deciding on a plan that is best for you.

Once you have figured out how much money you will have and where you want to live, you also need to decide BEFORE you retire what you will do with all that time.

You could live 25 to 30 years after you stop working at your current job. Do you want to just sit in an armchair and watch TV all those years? Or, do you have a bucket list of activities that you want to pursue before you die?

In addition, you may have discovered that your retirement income will not be quite as much as you hoped. What can you do to supplement it? Is there an exciting activity you would love to pursue that will also give you a way to earn a little extra money?

Retirement is your opportunity to re-invent yourself. Do you want to be a writer, artist, photographer, small shop owner, blogger or work for a non-profit? There are so many possibilities out there! I love this book that will help you figure out how to turn retirement into a truly awesome experience!

Finally, you need to stay up-to-date with the news that could affect your retirement. I highly recommend that everyone join AARP as soon as they turn 50. You will occasionally receive magazines and other mailings that will help you stay informed about changes in Social Security, Medicare and other news of interest to retirees.

You may also want to read my blog, Baby-Boomer-Retirement.com. You can look it up on the internet and read it, or you can subscribe to it and read it on your Kindle. In either case, be sure to check out the hundreds of articles in the archives (see the tabs at the top of the blog's homepage). The articles cover specific retirement communities in the United States, interesting places to retire overseas, changes in family relationships after you retire, the latest medical developments, and financial planning.