4 Ways to Retire on Your Own Terms
You’ve worked hard for decades. You’ve put in the hours and saved diligently, and it’s now time to reap the rewards. Starting retirement isn’t as easy as simply stopping going to work and watching the checks roll in, though. You want to maximize your retirement experience. These are your years, and you need to live them on your terms. Here are four ways how:
What you will learn:
Trade in that expensive life insurance policy for a settlement
Are life insurance premiums eating up your cash? If you have a life insurance policy you no longer need, a life settlement could be a good option for you. Cashing in your life policy with the insurance company may not give you a large sum, but there are companies out there that will buy your policy from you for a significantly higher amount than the cash value offered by the insurer. They will take over as owner of the policy, while you will walk away with a big check and the comfort in knowing you won’t be paying the insurance company another dime. Being relieved of paying expensive premiums can free up cash that you can use for other purposes, while also giving you a sum of money that you can do whatever you please with.
Guarantee income for your life with an annuity
No matter how much you have accumulated in retirement savings, the risk of outliving your income can be a real threat to living in retirement on your own terms. Annuities are unique in that they can mitigate this risk by offering a stream of income guaranteed to last as long as you do. In simple terms, an annuity is a long-term contract between you and an insurance company. In exchange for a lump sum of money or a series of payments, the insurance company will provide income to you for your entire life. The income can begin immediately, or you can defer income for several years, allowing your investment to grow at a set interest rate or based upon the performance of the market. Income can be for your life, the lives of you and your spouse, a certain number of years, or a combination of these features. That can provide some serious peace of mind.
Maximize your Social Security benefits
Knowing you are eligible for Social Security benefits is very rewarding, especially after spending your working life seeing the deductions for those benefits being taken out of your paychecks. What some people don’t know, though, is that it can pay to wait as long as possible before taking Social Security income. Early benefits are typically available at age 62, but the full benefit age is 66 for people born in 1943-1954. Gradually, the full retirement age will rise to 67 for those born in 1960 or later. Don’t leave money on the table. In order to maximize your retirement income, it pays to wait as long as possible.
Truly living in retirement on your own terms means not being beholden to anyone but yourself. A great way to do that is to reduce or eliminate debt. Mortgages, auto loans, credit cards – these are all common types of debt that keep us trapped. Paying off a mortgage or a car may sound extreme, but why not throw a few extra dollars down toward the principal each month? Starting retirement on the right financial foot is paramount, and doing it with as little debt as possible will relieve a great burden of stress.
What does your ideal retirement look like? We hope that these four ideas will help you transform that vision into a reality.