If you plan on retiring soon, chances are you’ve been diligently planning for this situation for decades since you don’t want to work forever. You also want to ensure that you enjoy your life in your retirement years so that you’re not stressing about finances or feeling restricted in what you can do after a lifetime of work. Certain factors will determine how much you enjoy your retirement. The good news is that we’ve narrowed it down to 10 key signs that you’ll enjoy a rich retirement.
Key Sign 1: You’ve Worked With a Tax Professional
You don’t want to be guessing regarding your retirement income. You want to have enough money to live your desired lifestyle once you’ve left the workforce. This will require you to work with a professional financial advisor so that you’re aware of how your retirement income withdrawal will happen. You don’t want to be confused about how you will get paid from your various retirement income streams.
Key Sign 2: You’re Ready for the Tax Implications of Your New Situation
When you’re working, your tax situation is often fairly simple since you may have one full-time job and a few minor sources of income. As a retiree, you may rely on multiple income streams that would change your tax situation. To enjoy a rich retirement, you must know your tax liabilities and how your finances will be impacted so that you can plan accordingly.
Key Sign 3: You Have Factored in Your Lifestyle in Retirement
If you want to enjoy your retirement, you need to have enough money saved for your ideal lifestyle. A rich retirement will have a different meaning for everyone since personal finance is personal.
What do you have to factor in? There are a few questions that you should ask yourself about your desired lifestyle:
- Where do you plan on living?
- Will you travel often in retirement?
- Will you give your children their inheritance early on in life?
- How much will your dream lifestyle cost?
Key Sign 4: You Have Relocated
You can save money and live rich in your retirement years if you move to a section of the country with a lower cost of living. While your job may have led you to a major urban center, you can relocate to somewhere your dollar goes a bit further when you exit the workforce.
Many retirees improve their finances in retirement by selling their homes and purchasing something cheaper in a more rural part of the country. You can save money with a lower cost of living and enjoy the profits from selling your primary residence to contribute to you living rich in retirement.
Key Sign 5: You Paid Off Your Debt
If you want to live a rich life in your retirement, you must pay off your debts while still working. This includes credit card debt and student loans, so you have fewer monthly expenses. With interest rates constantly rising, you want to ensure you’re tackling your debt to live a rich life when you’re no longer working. The quicker you pay off your debts, the sooner you can invest more aggressively toward your retirement.
Key Sign 6: You’ve Diversified Your Income
When you’re working, it’s essential that you don’t solely rely on your 9-to-5 job since we’ve seen that anything can happen. When you retire, you certainly don’t want to rely on one source of income. As a retiree, you’re going to want multiple streams of income to help you with your expenses. The income streams can include your company pension, Social Security benefits, stock dividends, real estate income, etc.
Key Sign 7: You’ve Stopped Financially Supporting Your Adult Children
Suze Orman suggests you stop supporting your adult financially if you want to enjoy a rich retirement. While it may be difficult to cut off your children, at some point, you have to prioritize your retirement so that you’re not stuck working longer than you have to. The goal is for you to allocate more of your income toward your retirement accounts to have more income in your retirement years and enjoy a rich lifestyle.
Key Sign 8: You Know How Much To Rely on Social Security
Even though Social Security benefits are often an essential aspect of retirement, it’s crucial that you don’t rely too heavily on this one stream. If you want to have a rich retirement, you have to know how much of your income will come from Social Security so that you plan accordingly. There are different strategies for utilizing these benefits. You may find that you could rely on your savings and investments for a few years in retirement while you wait to receive your full income from Social Security. You’re going to want to figure out when you tap into these funds for your retirement income to create a budget that makes sense.
Key Sign 9: You’re Prepared for Inflation
When you create your retirement budget, it’s important that you consider rising costs and leave space for inflation since prices will continue to increase every year that you’re out of the workforce. Rising prices will impact everything from how much you spend on groceries to your mortgage payments.
Key Sign 10: You Have a Plan for Your Free Time
The final key sign that you’re going to enjoy a rich retirement is that you’ve figured out how you’re going to spend your time now that you’re not working anymore. While having your finances in order will help you lead a rich life financially, you want to ensure that you have hobbies and interests that will keep you busy so that you don’t find yourself returning to work.
If you’ve been preparing for retirement, you could enjoy a rich lifestyle while out of the workforce. It’s important that you organize your finances so that you’re prepared for life after work. You don’t want to spend your golden years concerned about covering the bills when you could be enjoying yourself in a tropical location.
More From GOBankingRates