7 Tips for Retirement Planning

Are you planning to retire soon? If so, you’re in good company. (By 2030, all baby boomers — one-fifth of the U.S. population — will reach the traditional retirement age of 65.) This is an exciting but potentially overwhelming time. Here are seven things you can do to put your best foot forward in this next phase of your life:

1. Maximize employer benefits

Determine your eligibility for a pension or other retirement benefits through your employer and consider maximizing contribution limits in your retirement accounts. Check the IRS website for current limits. You may have an open 401(k) through a previous employer. Contacting the HR department with your details (such as your Social Security number) can connect you to those funds. Do you have health coverage through your job? Take advantage and schedule some dentist or doctor visits.

2. Utilize a Health Savings Account

Make the most of any Health Savings Account (HSA) benefits you have by strategically planning your contributions and expenditures. Consider maximizing your HSA contributions, as these funds roll over year to year and can be invested, growing tax-free for future medical expenses. This is an even better option if your employer has a match program.

Do you have a high-deductible health plan and need an HSA? You can open a Health Savings Account with Virginia Credit Union to contribute pre-tax funds to pay for medical expenses.

3. Determine Social Security payment

Social Security benefits could be an important source of income for you in retirement. Find out how much you can expect to receive in benefits by visiting SSA.gov. While you’re eligible to claim payments beginning at age 62, your full retirement age varies depending on what year you were born. You may also want to consider delaying your Social Security benefits to receive a larger monthly payment — payments grow by roughly 8% every year up to age 70.

4. Avoid scams

Age is just a number, but to scammers, it can be a calling sign. Unfortunately, many scams target seniors, so be sure to brush up on the scam red flags, be vigilant on your phone, and avoid clicking on links in texts in case they are scam texts.

5. Assess your financial picture

Review your current debt and determine how much money you’ll need to cover basic needs, such as housing, food, and health care, plus discretionary categories, such as travel or hobbies. Drafting a budget will help you understand how much you can afford to spend and how much you have coming in each month from Social Security, pensions, or part- time work.

Hoping to retire debt free? This is also a great time to get high-interest debt under control. Learn more about various debt-reducing strategies here.

6. Sign up for health care

You can enroll in Medicare beginning at age 65. Health care costs can be a major expense in retirement, so it’s important to plan ahead. Consider buying additional health insurance to cover any gaps in Medicare coverage, and be sure to factor in the cost of prescription drugs. This is where those funds you’ve saved in an HSA can come in handy to pay for health care expenses tax-free.

7. Meet with a financial planner

Your financial institution may be able to connect you with someone who can review your retirement portfolio and suggest adjustments — for example, transferring your 401(k) funds to an IRA or Roth IRA, which can offer you more investment options and the ability to diversify your holdings. A financial planner can also help strategize your budget. Reflect on what you want your retirement to look like, and be intentional in communicating your goals.

In preparing for retirement, remember that at Virginia Credit Union, we're dedicated to helping you define and achieve your unique vision of financial success. Every step you take today can help secure a more comfortable and fulfilling retirement tomorrow. Whether it’s maximizing contributions and savings, being vigilant about avoiding scams, or carefully managing your investments, staying informed and proactive is key.

Content provided in part by GreenPath Financial Wellness.