The Big Decisions That Affect Your Retirement


Life is all about choices, of course. But many people fail to make the right ones when it comes to their retirement. As you approach your senior years and think about giving up work, your choices will be limited depending on the previous choices you have made. Here are the biggest decisions you will need to make before you retire. The rest, as they say, is up to you!

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Should I save or spend now?

It’s an inconvenient truth that the best retirement plans need to be in place as soon as you start working. Sensible people initiate the process at a young age. Most people fail to save anything until they are in their thirties. And, an uncomfortable number of people are still waiting to plan for retirement as late as their mid-forties. It makes sound financial sense to start investing in your 401(k) or private pension scheme as early as possible. The numbers are significantly in your favor if you do.

Should I choose an employer that matches my contributions?

You should always look for an employer that offers matched contributions on your 401(k). And, whatever percentage they offer, make sure you are saving enough to get that match. It’s free money, in essence, and will make a significant difference to your lifestyle. For example, let’s say you have two people saving from the age of 30 at a rate of 6 percent. One of them works for an employer that doesn’t match and receives around $575,000 by the time they restore. The other works for an employer that matches 3%. They will save for the same duration of time but come away with almost $750,000. So, if you get two job offers in the future, always choose the one with the better contribution match.

Cashing in your Social Security early

As you approach retirement, you can start collecting early Social Security payments – from the age of 62. However, you should put this decision off for as long as possible. The reason? It’s simple. If you start collecting your social security early, you will only get it a discount of up to 30%. And, when you finally reach the official retirement age, this discount will still apply. The solution is simple, too. Don’t claim your Social Security until you reach that retirement age and you will be 30$ better off for the rest of your life.  

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The right Medicare plan

There are several things you need to think about when you reach Medicare age. First of all, it is vital that you meet the deadlines. You have to apply for Medicare during the enrollment period. It starts three months before your 65th birthday and ends three months after. Failure to do so on time means you will be paying more premiums. But you also have to ensure you have the correct level of cover. Most people on Medicare have the wrong plan, so speaking with an advisor should give you some benefit. And, of course, there are other issues. As state, Medicare does not cover you for everything. It is vital to fill in those gaps with a supplemental Medicare Cover if you need to. Get your Medicare wrong, and it can cost you a significant amount for the rest of your retirement, meaning a cut to your disposable income.

The right time to retire

If you can delay retirement for as long as possible, you will have a lot more money to enjoy. Of course, you might feel that you can’t work full time anymore. But even a part-time job can help you stop drawing from your savings and give you a longer period to enjoy them. According to, not only will part-time work save you money, but it’s also great for your health. You will still feel like a valued member of society with something to contribute. And, of course, it’s an opportunity to do something you have a genuine interest in.

Cashing out on your retirement plan

As you get nearer to retirement, you will start to hear a lot more about the opportunity to cash out your pension plan. Don’t. Cashing out your 401(k) will mean you also get significant penalties. In fact, any interruption of your plan will do the same thing – reduce your final balance. It Includes long-term illness, periods of unemployment, or career breaks. It is essential that you keep paying into your plan as much as possible until you reach that all-important retirement age.

We hope this has helped you understand some of the big decisions you will need to make about your retirement. Be sensible and keep saving!