We’ve all done it. We envision what retirement life will be like.
Planning ahead can put into focus what life will become once we leave the workforce.
Many decisions are ahead of you, which will require a lot of careful thought. Regardless of where you see yourself, it’s important to keep certain things in mind.
Have you considered these five factors as you ponder the weighty decision of retirement? Read on to see how these questions and answers can help you pave the ideal path to retirement.
What are your travel plans?
This question means more than you can imagine. Time spent traveling, time away from home, budget, and the frequency of travel are just some factors.
Your post-retirement itinerary should be clear on these categories to give you an idea of where your time and money will be spent.
What does my new life look like?
It’s obvious that retirement means no more work. Initially, you’re going to enjoy all your free time to unwind and relax. Heck, you may find an adventure or two. But what happens after?
You must determine what your new life will look like after the few first months of retirement. This is crucial to long-term planning.
What’s in store for my social life?
Retirement should be a happy time. Creating opportunities for socializing may not come as easy anymore once you’ve exited some of your work networks.
Remember, you have to be more proactive to engage your friends and choose activities that may lead to new friendships. Your goals once you reach retirement is not just about finances, it’s also about being happy. Take time to think about your social life as you enter this exciting time of life.
What stays and what goes?
You may consider decreasing your involvement in other activities that were connected to your profession. Removing yourself can save money and time and makes room for your newfound interests.
Is it time to downsize?
Now that your income will change and your commute becomes a non-factor, downsizing may cross your mind.
Along with the savings of moving into a smaller home, you’ll also want to consider what to do with your possessions, what to sell and keep, and where you’ll live.
Relocating into a new home will have plenty of pros and cons to consider.
A home equity conversion mortgage (HECM)* is something else to think about. Let’s talk about eligibility first. If you’re over the age of 62 and live in the property as your primary residence, you’re likely a candidate for this program.
You can eliminate your monthly mortgage payments and purchase a new home through an HECM.
This FHA-insured mortgage allows you to use the equity from the sale of your previous home to buy your next residence in a single transaction.
This tool is used by individuals to find the right-sized home, be closer to family and friends, lower costs of living and possibly enjoy a new and exciting community that’s designed just for them.
*(1) at the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other proceeds; (2) charges will be assessed with the loan, including an origination fee, closing costs, mortgage insurance premiums and servicing fees; (3) the loan balance grows over time and interest is charged on the outstanding balance; (4) the borrower remains responsible for property taxes, hazard insurance and home maintenance, and failure to pay these amounts may result in the loss of the home; and (5) interest on a reverse mortgage is not tax-deductible until the borrower makes partial or full re-payment. This material is not from HUD or FHA and has not been approved by HUD or any government agency.