You Will Get to Retire - These Five Steps Help You Prepare

We hear about retirement all our lives, but a recent poll suggests many people are unprepared for the day they no longer have to work. The poll found more than one-third of Americans are unprepared for retirement.

The poll found that 36% of Americans have not set aside money for their future retirement, and 38% say they will work beyond age 65. 

Hopefully, you have already figured out how much money you'll need after retirement to maintain your lifestyle and cover your expenses. You can do several things to figure out the amount of money you will need to fund your retirement, but you need to take the time to calculate your needs.  

There are other items to consider. Here are five steps to prepare for your upcoming retirement.

Decide When to Retire

The most popular age to retire is somewhere between 65 and 70, but others may choose to continue working past this point if they can. While you can technically retire at any age, there are certain risks associated with retiring early:

• You will have less time to save for retirement

• You could experience a sense of loss or identity crisis arising from losing your job title

• There may be financial penalties

Decide Where to Retire

Would you rather stay close to home or move far away? This decision can make a big difference in how you spend your retirement and will depend on the connections you have where you live now.

While some retirees seek a warm climate, others prefer four seasons. You'll also want to think about whether or not you like spending time outdoors because this will factor into which climates are best for your retirement lifestyle. 

Here are 50 locations, based on the weather, to consider.

Decide What You'll Do in Retirement

Retirement can also be a chance to try something entirely new: something you've never had the time for before, like painting, playing guitar, or building birdhouses. Perhaps now is the opportunity to get fit by joining a gym, cycling, or doing yoga at home.

You can choose to do something you've done before — something that brings comfort and joy to your life. You can catch up on your hobbies or give back through volunteering in your new free time. The choice is yours!

Plan for Your Health Care Needs

Medicare is a health insurance program primarily for those aged 65 and older. You have paid taxes for Medicare your entire life. It's vital to understand what kind of coverage Medicare provides because it determines how much money you'll need in retirement to maintain a comfortable standard of living.

You will usually purchase a Medicare supplement to pay for the deductible and items Medicare will not pay for. Plus, there is prescription drug coverage you can also purchase. 

Medicare and supplements will not pay for most long-term care services beyond 100 days of skilled services. Since the likelihood of you needing assistance with daily living activities or supervision due to dementia is high and gets higher as you get older, these expenses can cripple your finances and create a burden on your loved ones. 

Long-Term Care Insurance is an option for many families but is usually purchased before retirement. 

Medicaid is only an option for health care, including long-term health care, if you have little or no income or assets.

As with most things in life, retirement takes a little planning — financial planning, to be exact. You have to have saved enough to enjoy a comfortable retirement during your working years. 

One way that some people choose to save is with an IRA. An individual retirement account is a retirement plan that offers tax advantages for retirement savings. Many employers offer 401(k) or 403(b) retirement plans which are usually rolled into an IRA when you leave your employer or retire. 

You can even add noncash assets to your IRA. These types of accounts are just one part of retirement planning. Talking to a retirement specialist early is critical. 

Get Started on Your Estate Plan

Don't put this off: You'll want the following documents in place at least a few years before you retire:

• Will

• Trust

• Power of attorney

• Health care proxy

• Advance medical directive

These documents outline your wishes regarding how your money should be handled in the event of your passing. Your estate plan can also provide instructions as to what happens if you're incapacitated and unable to make decisions for yourself.

Follow these steps to prepare for your upcoming retirement. Create a plan now to be happy and comfortable later. If you're ready on all fronts, you can look forward to spending your golden years doing everything you've always wanted — your way.