Assessing Your Financial Situation Post-Divorce
It’s good that you’re starting to think about your future transition into retirement while you’re still several years out. You’re giving yourself plenty of time to get your finances in order and make any necessary changes to ensure you have a secure retirement. However, your divorce may bring some changes that affect how you need to navigate these last few years. For more detailed advice, consider finding a financial advisor who offers retirement planning.
Can You Cover Your Living Expenses?
The baseline for a comfortable retirement is ensuring you can reasonably cover your living expenses with the income you’ll have. Fortunately, a pension that replaces a large percentage of your current income should make that a little easier to figure out. If you were to retire today, your pension would cover 73% of your current gross income, but you plan on working for another four or five years. As a result, you’ll need to calculate how much more income your pension will provide. Then, you can add your 401(k) withdrawals to get a better idea of what kind of a retirement income you’ll be working with.
Planning for Health Insurance
If you retire before you turn 65, what will you do for health insurance before becoming eligible for Medicare? Some financial experts recommend replacing between 70% and 90% of your pre-retirement income. As you get closer to retirement, continue to refine your estimate so that it will be as accurate as possible. If you need help building a retirement income plan and budget, consider working with a financial advisor.
Balancing Retirement Goals and Family Obligations
Ideally, you would like to travel but also have to help your kids save for college. Your son’s and daughter’s 529 plans already have $21,000 and $18,000 respectively, but you may need to contribute more as tuition costs rise. Balancing your retirement goals with family obligations is crucial, and having a clear financial plan will help you achieve both.
In conclusion, navigating divorce and retirement simultaneously is challenging, but with careful planning and expert advice, you can achieve financial stability and enjoy your golden years. Consider consulting a financial advisor to tailor a plan that suits your unique circumstances.