Remember: 65 is just a number
By the time you turn 65, it’s common to feel pressure to decide on your retirement plan. But according to Timothy Wyman, managing partner for the Center for Financial Planning in Southfield, Michigan, that age is just a number.
“Some people feel almost like society tells them they need to retire at a certain age. But really, there’s no magical age,” he says.
Deciding when to retire is a personal decision that will require you to really assess your life – from finances to work to lifestyle –to make the best decision. Here are five questions to help you.
1. How do you feel about work?
Do you love going to work or are you ready for change? Research has shown that working longer can help keep your brain fit with mental and physical stimuli. However, it’s unhealthy to continue doing something you dislike or find stressful. Keep in mind that you can find a part-time job in retirement that you’re passionate about and won’t require long hours.
2. What does your financial situation look like?
According to Wyman, if you have outstanding debt or not much in savings, you might not be ready to retire. While your best bet is talking with a financial advisor about your unique situation, as a general rule of thumb, your nest egg savings should be about 10 to 12 times your current income.
If you live into your 90s or beyond, you’ll need a lot more savings to live comfortably. “The bottom line is that it takes a significant amount of money to fund a 30-year retirement,” Wyman says.
3. What do you want your health care plan to look like?
Although you qualify for Medicare once you turn 65, you’re not necessarily required to sign up if you’re already on an insurance plan through your employer or spouse’s employer. It’s also important to remember that Medicare doesn’t cover dependents, so if you have family members under your current employer’s health care plan, they may lose coverage if you drop it and sign up for Medicare. Talk to your human resources department to see if you can remain on your current plan when you turn 65. If you have a Health Savings Account, you can use those dollars to pay your dependent’s premiums for an individual plan when you transition to a Medicare plan.
4. What does your health look like?
If you’re healthy, stimulation from continued work can be rewarding. If you have health issues and are concerned about your quality of life in the future, you may want to retire into a quieter, less demanding way of life sooner.
5. What do you want to do in retirement?
Even if you have enough money saved up, it’s a good idea to know how you’ll spend your time in retirement, whether that’s traveling, pursuing a hobby or working part-time. Retirement researcher and financial advisor Wes Moss has found that retirees with three or four core hobbies are happiest, so if you do decide to stop working, make sure you won’t be spending your time alone or inactive. If you plan to travel when you’re retired, you’ll want to look for a Medicare plan with coverage, fitness benefits and digital tools that travel with you, like Blue Cross Blue Shield of Michigan’s Medicare Plus Blue PPO plans and Blue Care Network Advantage HMO-POS plans. With the expansive nationwide BlueCard network, you can see doctors out of state that accept Blue Cross and Medicare and save with in-network copays and deductibles routine care, labs and hospital stays.* If you do need the care of a doctor while traveling, out-of-network costs can put a big damper on your vacation budget.
This information is not a complete description of benefits. Contact the plan for more information. Limitations, copayments, and restrictions may apply. Benefits, premiums, and/or copayments/co-insurance may change on January 1 of each year. The provider network may change at any time. You will receive notice when necessary.
