With its severe impact on the economy, the Covid-19 pandemic has undoubtedly changed the way Americans view retirement. However, regardless of their financial situation, many individuals should certainly review where they stand concerning their retirement plans this coming year. On that premise, the following article unveils some essential retirement tips and strategies for those who haven’t started planning yet.
Planning for an early retirement
Whether it is layoffs, involuntarily, or due to not feeling safe to go back to work and being exposed to covid-19, especially for the older workers, many employees nowadays are forced to leave the workforce much earlier than their retirement age. That being said, a lot of workers should consider setting retirement plans for emergency cases even if retirement seems far off now.
Dealing with debt
Regardless of the time an individual plans to retire, they should pay off their debts and eliminate mortgages, loans, and credit card balances while still working. This strategy will undoubtedly ease off the burden and stress of the debt later on.
Setting a health insurance strategy
As there are penalties if individuals fail to enroll on time in health insurance programs, such as Medicare, it is undoubtedly better to plan months so that the health coverage kicks in on time.
Working a part-time job during retirement
Whether an individual is retired or not, it is a good idea to consider working a part-time job to have an extra income source during the retirement year.
Considering a Covid-19 hardship withdrawal
The CARES act, which stands for Coronavirus Aid, Relief, and Economic Security Act, has certainly eased up the situation for those severely affected by the covid-19 pandemic. Indeed, CARES has waived penalties about early withdrawals of retirement accounts like the IRA and the 401(k). Individuals are now allowed to withdraw up to 100 thousand dollars from the stores and have three years to repay them into their retirement accounts.
Practicing retirement spending
Individuals should start developing a spending plan as early as possible. Individuals should undoubtedly monitor their spending patterns and make adjustments as need be.