Retirement — Are You Ready?

December 14, 2016

That may be a hard question to answer. After all, you can’t predict what will happen in the future. But you can make sure you’ve considered as many of the issues as possible before you make the decision to stop working.

Start with Your Income

Of course, the first thing you need to know is where your retirement income will come from. If you’ve been contributing to your employer’s retirement plan or an individual retirement account for a long time, you may have accumulated significant assets in your account. You might also have other savings and investments in addition to your retirement savings that you’ll be able to tap.

And you could be entitled to income from a traditional pension plan through your current or former employer as well. If you are, make sure you know exactly how much your benefit will be and when distributions begin. Review your options for receiving the payouts carefully before you decide on one of them. Once made, your choice is generally irrevocable.

Beginning as early as age 62, you’ll be able to collect Social Security retirement benefits, too. However, if you won’t need the income right away, waiting until your full retirement age or beyond (up to age 70) to start collecting will result in a bigger monthly check. But there are other considerations, such as your overall health.

By reviewing all potential income sources with you, your financial professional can help you assess whether you’ll have enough money to support your lifestyle for what could be many years.

Play with the Numbers

As retirement nears, you may want to make some adjustments to the mix of investments in your portfolio. Consider having two to three years’ worth of income in cash or its equivalent to provide a more secure income stream. You don’t want to be in the position of having to sell stock investments for short-term cash flow needs, especially if the equities markets are down when you retire.

Here’s to Your Health

How will you pay for health care once you retire? When you turn 65, you’ll probably be eligible for Medicare. However, if you don’t have retiree medical coverage through your current or former employer, you may also want a supplemental policy to pay for expenses that aren’t covered.

Have a Plan

Have you thought about what you want to do in retirement? Maybe you’ll want to keep working. Whether you begin a new career, take a part-time job, or continue to work in your current field, having additional income may allow you to stretch out your retirement assets for more years.

If a working retirement isn’t for you, think about how you want to spend your time. Traveling, pursuing hobbies, and volunteering can be fun, stimulating, and productive ways to stay active and prevent boredom. But be sure to include any added expenses in your budget.

Nobody Says You Have To

Remember that retirement is not just a physical separation from work — it’s also a psychological one. Ask yourself if you’re ready to make that adjustment. If the answer is no and you have the option, keep working until you’re sure you are ready to leave the world of work behind.

For more information regarding the benefits of your retirement plan, please contact your Human Resources Department or access your account online.




The content of this material is for informational purposes only and intends solely to serve as a guide and additional tool in helping you plan for retirement. Banco Popular de Puerto Rico, its affiliate or subsidiaries do not engage in the offering of tax, legal or accounting advice. Please consults with an appropriately licensed legal, accounting or tax professional for any necessary guidance. The investments products offered through Banco Popular’s retirement plans, including any proceeds generated, are not insured by the FDIC, are not deposits or obligations of or guaranteed by Banco Popular de Puerto its subsidiaries and/or affiliates. Investment products involve risks, including the possible loss of the invested principal. Please request a prospectus and it carefully before investing.


Source: DST