If you're about to retire in 2016, you must be wondering whether this year would finally be the year when you could close the wide retirement gap. The gap is the difference between the total amount of money that you should have saved for your retired life and the money that you have saved in reality. The gap among the Americans is gradually getting dangerous. New reports from Fidelity Investments indicate that there are plenty of gaps in the portfolios of the retirement savers. Most of the retirement savers don't have enough money in their savings account and they're desperately looking for some expert advice on the ways in which they can improve their present financial situation.
Worthy retirement advice for the soon-to-retire
Retirement is a transition into a new phase of life which requires immediate change to your lifestyle and finances. If you're going to retire in 2016, there are some final preparations that you need to take. Take a look at some useful advice.
1. Utilize your workplace retirement benefits: Your last few months at your workplace are the last chance to reap benefits of your workplace retirement fund. If you have the opportunity, try to tuck in some more money into your 401(k). Workers above the age of 50 can put in as much as $24,000 in a 401(k) in the year 2016. Also ensure that you're vested in your workplace retirement fund. In case you're close to becoming vested, sticking around a few more dollars in a month can be worth thousands of dollars in retirement funds.
2. Determine whether to roll over 401(k): While you retire, you need to keep track of your retirement accounts and consolidating your retirement accounts can alleviate the stress of supervising multiple accounts. Moving your money to an Individual Retirement Account or IRA gives you more options for investment and sometimes lower fees as well. Therefore, you might just consider rolling over your 401(k) into an IRA but ensure knowing the pros and cons of doing so.
3. Get new health insurance: If you've been getting group health insurance through your employer, now that you're retiring, it is important for you to get individual health insurance policy before leaving the company. If you've crossed 65, you may even sign up for Medicare as it is vital for you to sign with Medicare during 7th month window of your 65th birthday in order to avoid the premiums. So, sign up as soon as you can.
4. Choose an age to sign up for SS: When should you start your Social Security benefits? This is one of the most important retirement decisions to make. Payments are usually reduced if you claim the payments before the entire retirement age, 66 for all those people retiring in 2016. Retirement payouts on the other hand will increase if you can delay the claiming until reaching the full retirement age, 70. So, make this vital decision.
In case you're retiring this year, choose to take the above mentioned steps as a part of your retirement planning strategies.