Looking Toward Retirement? Don't Overlook These Six Things

Are you preparing to retire soon? If so, and if you're like most who are getting ready to say goodbye to the working world, you probably made a must-do roster to navigate the important life transition. That's a very wise move. However, many soon-to-be retirees need to remember to include one or more points on their checklists. 

It's a common and understandable oversight. Who hasn't returned home from grocery shopping only to realize they forget to buy one or two items on their shopping list?

The difference is you can always pick up bananas or a gallon of milk on the way home from work tomorrow. When it comes to retirement-related must-do tasks, do-overs aren't always so simple. That's why it's worth the effort to catch everything the first time around. 

Some of the most overlooked items include taxes, unplanned health care costs (like long-term care), the need for a smaller living space, travel plans and associated expenses, volunteering opportunities, spending more time with grandchildren, part-time jobs, more time for church activities, and more. 

Review the following topics to see if they are on your to-do list. If not, perhaps you should add them. There might even be more, as planning will make for a successful and enjoyable future retirement. 

Various Taxes and More Taxes!

Understandably, many people are so excited to enter the non-working portion of their lives that they draw a blank when thinking about the various kinds of taxes they might have to pay in addition to the standard income tax. But for anyone who continues to work part-time, invest, buy or sell personal goods, rent property, or engage in a number of other taxable activities, the expenses in this category can add up quickly. 

It's worth noting that millions of retirees own and earn income on rental properties as a passive way of bolstering their bank accounts and lifestyles.

Those involved in real estate usually know the property tax ranking by state to better understand the prime locations for income-producing rental units. It's a fact of senior living that income, sales, property, and other kinds of taxes can take a bite out of a retiree's total annual earnings.

One reason real estate is such a popular investing category for older adults is that they can scan potential opportunities based on total cost, renter demand, specific location, and estimated ROI (return on investment). While there are other factors that impact the overall attractiveness of a particular piece of property, property tax is another because it directly affects the bottom-line income on any real estate investment, as do all overhead expenses.

Higher Health Care Costs

It's a fact of life that as people age, they need more health care. Some people on the verge of leaving the workplace are apt to forget this essential principle. Fortunately, you can avoid the negative ramifications of overlooking this vital point. Make a detailed monthly budget based on best estimates of what you'll need to spend on medical-related costs like extra checkups, possible cancer screenings, special treatments for serious illnesses, and more.

If you have a Health Savings Account, be sure to fund it to the maximum. You get to keep this money and it grows tax deferred and comes out tax-free if used for health-related expenses.

You will have insurance like Medicare and supplements. Often people forget about long-term care, so considering Long-Term Care Insurance is essential, although ideally obtained before retirement. 

The Need to Downsize

The need to move into a smaller living space can sneak up on you. Plenty of seniors are surprised to learn that, even if they own their homes outright, they no longer need four bedrooms, three baths, and a large recreation room for two older residents. Make a downsizing plan that includes getting rid of all unnecessary personal goods and shopping for a more efficient home.

Travel Expenses

It's only natural to want to travel more when you finally have the time. However, far too many seniors neglect to budget for increased travel. What's the solution? As with so many other often overlooked retirement expenses, the answer is planning. Start by making a short wish list of trips you'd like to take during the first five years after retiring. Then, do a bit of online research to make reasonable estimates of what each excursion will cost.

Grandkids

For so many older adults, grandkids are the center of their world. That's another one of those human nature components of being older. What's the unexpected part? Few retirees allow enough time for visiting grandchildren, particularly those who live far away. Likewise, keep in mind that you might want to include your children's children in wills. Now is the time to consult with a lawyer and take care of all the pertinent details about how to distribute.

Part-Time Work & Volunteering

If you intend to work part-time or take on a volunteer position, arrange the schedule now so you won't be caught off-guard by the need for several hours per day to take care of the responsibility. With part-time work, choose something you enjoy and doesn't require a long commute. Choose volunteer positions based on personal principles and activities that give you a chance to truly help others.

Planning will make the road to retirement much smoother. Once retired, be sure to remain active, physically, and mentally, to give you more years to enjoy your retirement.