Another home option is the reverse mortgage. With a reverse mortgage, one receives regular, nontaxable payments from the lender instead of paying these payments. The principal and interest are repaid at a later date, either when the house is sold or when the owner dies. Reverse mortgages are a fairly recent option for retirees, and terms vary widely, so the contract should be carefully reviewed before signing.
Retirement Strategies
If one is at retirement age or nearing it and has not accumulated a significant nest egg, one will likely need to work well into the retirement years. One should consider a plan of action if the employer forces one into retirement or even downsizes before one is eligible for retirement benefits. This is a situation where one should take inventory of skills along with the market for those skills. One should also make attempts to hone additional skills in order to increase marketability.
For those individuals who planned well in advance for the retirement years, there is still some additional planning to do. Considerations should include housing choices, travel plans, and possible relocation. After retirement, several other questions should be considered including:
Is health insurance available under the employer's retirement plan or will one need to secure this for oneself? Even if company retirement benefits include health insurance, one might need supplemental insurance.
When you finally retire from your job, how will the 401(k) or other pension plan finances be distributed? What are the federal and state tax consequences of the different distribution options?
May these plans be left with the employer or must one invest it in another plan? If given the choice, which will be best for you and your investment?
As is evident in the above examples, retirement planning does not end at or near retirement. Retirement planning is an ongoing process that a person needs to keep up with if goals are to be met. For those at or near retirement age, the planning process goes from accumulation of wealth to making the right decisions about assets. While one will still continue to accumulate money from investments, one will also be looking at using that money for day-to-day living expenses. The right choices are imperative in order to have the retirement lifestyle one desires.
Summary
In summary, retirement planning is the thought and commitment that is put into providing for income and...
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