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2018 – Nine Resolutions for Pre-Retirees

Sudhir Mathuria Licensed Professional Health Life 360 6776 Southwest Freeway, Suite # 178 Houston TX 77074 713-771-2900 www.MyMedicarePlanning.com

Sudhir Mathuria
Licensed Professional
Health Life 360
6776 Southwest Freeway, Suite # 178
Houston TX 77074


If you will be retiring in the next few years, you can consider yourself a pre-retiree. Those who plan to retire in the next five years need to start preparing their finances for the transition. Here are some of the New Year’s resolutions pre-retirees should make this year to get ready for retirement:
1. Identify goals and objectives. At this point in your life, you need more than a vague notion of what retirement will entail. You have to know what your retirement looks like before you get there. Start thinking about retirement travel and hobbies and how much those activities will cost to see if you can afford them. check with your spouse to ensure he or she doesn’t have different plans.
2. Pay off debt. If you’ve been talking about getting out of debt, now is the time to get serious. A mortgage, credit card balance or even student loans can cripple a retirement budget. Pay off the bills now while you are earning money. That will leave you in a better place financially than waiting until retirement to draw down savings to pay off the debt.
3. Take advantage of catch-up contributions. Workers who slacked off on saving when they were younger get a chance to put more aside once they hit age 50. The government allows catch-up contributions of $1,000 to traditional and Roth IRAs each year, for a total possible contribution of $6,500 annually. Older workers can also put an additional $6,000 aside in their 401(k) account for a total of $24,500. Those who are age 55 or older and use a high-deductible health plan can put another $1,000 in their health savings account as well. That brings their maximum tax-deductible HSA contribution to $7,900 for those with a qualifying family health insurance plan.
4. Create a retirement income plan. Having enough money in retirement savings is only the beginning of preparing for retirement expenses. The question is how are your savings going to create income? Different buckets of money may fall under various tax rules. Some money may be tax-free, while other sources of cash are taxable. Pre-retirees need to draw up a plan that minimizes taxes while providing the income they need to maintain their lifestyle.
5. Decide on a Social Security strategy. Part of determining an income plan is figuring out when to claim Social Security. Although retirees can claim benefits as young as age 62, they can lose up to a third of their monthly benefit amount by failing to wait until their full retirement age. People living longer, it can make sense to delay the start of Social Security. Doing so provides an 8 percent increase in monthly benefits for each year from full retirement age to age 70. The nice thing about waiting is that these values are guaranteed to go up.
6. Reallocate investments. It’s been eight years since the end of the last recession, and the stock market has hit a series of record highs in 2017. That’s good news for investors, but it can lull people into a false sense of security. We’ve become immune to what the market can doThe pre-retiree market is probably in the biggest danger zone I’ve ever seen. Pre-retirees need to be prepared for a market correction by reviewing their investments and reallocating them to more conservative funds as needed.
7. Review life insurance coverage. Life insurance traditionally hasn’t been considered a need for retirees who are often empty nesters and don’t have to provide for a family. However, there can be a need for life.
8. Research health insurance options. If you’re retiring early, have a plan for health insurance. Medicare won’t begin until age 65, so early retirees need to find coverage elsewhere. COBRA coverage allows many workers to continue buying their workplace coverage, but the price can be exorbitant. Buying an individual policy through the government health insurance marketplace is another option.
9. Meet with a financial advisor. Even if you don’t have a regular financial advisor, paying for a session with a planner can be money well spent. A finance expert can help identify anything that may be lacking in your retirement plan. An advisor can help a pre-retiree realistically estimate what a budget will look like in retirement. Plus, advisors can help you prepare for the possibility of a market downturn. Reviewing risk profile is a key thing to do in 2018.
Pre-retirees have plenty to keep themselves busy in 2018. You can spend time dreaming about the future, but don’t forget to also take these practical steps to ensure your retirement will be a successful one.
For Medicare, Long Term Care, Individual and Small group Health Care, and effective retirement planning contact Sudhir Mathuria @ 713-771-2900.

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