Senior Resources » 6 Ways to Effectively Prepare for Retirement

6 Ways to Effectively Prepare for Retirement

African American over 65 man sitting at desk working

With the right planning, you can ensure that you are able to live comfortably, without financial stress, during your retirement years. Here are some tips that can help you effectively plan.


1. Assess Your Financial Situation

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Determine your current income, expenses, and debts, then calculate your expected expenses in retirement. This will help you determine how much money you will need to save and how much you can afford to set aside each month. Assuming that between your savings and whatever benefits you receive your expenses will not outpace your sources of money, then you’re all set for retirement from day 1.

2. Speak to Your Employer About Flexibility

man in jean jacket on a computer

Here’s an interesting statistic: three in four senior citizens would like to work indefinitely, given the right flexibility to do so. This isn’t surprising when you consider what work is to most. It’s a highly social activity that keeps a person connected to their community, and it provides the satisfaction that they’re contributing. However, the full-time, 9-5 slog is probably a bit much by the time you become a senior citizen, so exploring where the opportunities to work flexibly might be is a good idea, as it might be the case that you can continue to work, just on better terms for your age and lifestyle.


3. Consider Your Succession

woman looking over paperwork

Many people spend their entire lives building up skills and expertise that are of invaluable assistance to their business. Many others even have their own businesses. In these cases, the one thing you don’t want is for your life’s work to disappear the moment you step out of the office. In the years leading up to your retirement you should consider how to pass on your knowledge, and/or find the next leader for your business. If you’re high enough in the business to have shares or another financial interest in the operation, it is in your best interest to continue to see it thrive. Alternatively, if you are a business owner, you might want to consider selling the business. Getting the best value out of that can take anything up to five years. You need to prepare the business in the right way and then have the right negotiations with the right potential acquirers. Make sure you leave plenty of time to work on that.

4. Make the Right Investments

money bag investment

While you’re still employed you can take a bit of a risk with the investment portfolio, as the goal is to build wealth. As you approach retirement, however, that focus needs to shift towards being more conservative. Diversification is key when it comes to investing for retirement. Consider investing in low-cost index funds and exchange-traded funds (ETFs) that provide exposure to a broad range of stocks and bonds. This will help you to reduce the risk of financial loss and increase the chances of realizing your retirement goals.

Read Next: Want to Know the Secret to Higher Investment Returns?

5. Look for Your Retirement Home  

small blue house with flowers

When you’re working full-time, you probably need a home that is fairly close to work. This changes in retirement. Suddenly you can live anywhere, and this is an opportunity to “downsize,” and move into a smaller home that better suits your lifestyle while pocketing the difference from the sale of your larger home. Moving out of the city into the region this way can leave you with a substantial boost to your retirement money. Besides, with the kids having long moved out, which sounds better: a suburban home in an area that empties out every day as people go to work… or a quiet spot near a beach with great fishing?


6. Get Your Affairs in Order

Estate Planning

No one likes to contemplate their mortality, but it’s important that you do. Creating a will ensures that in the event of your passing, your family is looked after and your assets are distributed as you wanted them to be. In other words, your life’s work will be comfortably passed on to the next generation.

Read Next: How to Get Your Affairs in Order

For similar reasons, you also want to make sure that you have a good life insurance policy. Death is – somewhat ironically – one of the most expensive events in a person’s life, and can be a real financial burden on those around you. A life insurance policy makes sure that the end-of-life arrangements and costs aren’t an additional level of distress at an already difficult time.

Need Something Else?

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Check out these thrifty tips is you’re looking to save some money:

Click here to learn about estate planning.


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Originally published April 17, 2023


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