How we retire will determine how our lives will be in the future.
To achieve the target number for retirement, we need to live as economically as possible, increase income, and maximize retirement savings.
Here are tips on what things need to happen before retiring to make it easier.
Plan Your Retirement Time
Between retiring at the end of 2021 and applying in January 2022, there is a significant difference in terms of pension. If you use it before the end of the year, you will be eligible for this year’s January and July pension hikes. If you apply in January 2022, you will use only the higher amount for your pension. In addition, there will be a difference in how the pension is calculated.
There is a specific difference in pension between retiring by the end of 2021 and applying in January 2022. If you use until the end of the year, you will add this year’s January and July pension increases to your pension. If you apply at the beginning of 2022, you will add only the increased amount to your retirement in January of the New Year. There will also be a difference in the determination of the pension.
The thing to do before the first retirement is to plan for retirement. If you plan to retire before the specified deadline, you must carefully plan.
This retirement plan must also pay attention to our needs for old age, including housing, financial planning, and what activities will be carried out during retirement.
If you feel you can’t decide for yourself, you can ask your partner or financial planner for advice. It is essential to get the views of others.
Also Read: Recognize 4 Signs We’re Not Ready to Retire Early, Don’t Take the Mistake.
Pay off Debt
Before the second retirement, the thing to do is pay off all debts. Make sure we record all debts or credits owned.
We can also stop using credit cards at retirement and start shopping with cash.
As we get nearer to retirement, we must ensure all debts, even the smallest ones, have been paid off. It is essential not to be overwhelmed by paying large debts but no more income.
Determine Monthly Expenses
Before the third retirement, the thing to do is determine the monthly expenses.
Of course, we need to look at how much money we need when we retire again—both monthly and annual expenses.
Don’t forget to consider the number of unexpected expenses that could occur. Ideally, we can discuss this with a partner to minimize the risk.
Also Read: This is a smart way to retire earlier so you can enjoy life. Do you have to be disciplined?
Save Pension Funds for Investment Instruments
Before the fourth retirement, the thing that you must do is save the pension funds into investment instruments with low risk.
We can still benefit from pension funds by putting them into low-risk investment instruments.
Please don’t take the risk by keeping it in high-risk instruments.
The pensions of those you first insured before 2000 and between 2000 and 2008 and those with insurance after 2008 are calculated differently. The pension is calculated according to the number of premium days, monthly average earnings, inflation, and growth rate in its simplest form. The pension amount multiplies the average monthly earnings with the monthly bonding rate calculated according to premium days. Average monthly payments are also calculated according to periodic consumer inflation and add 30% to the growth rate. The pension happens by multiplying the updated monthly earnings and the pension rate, and this salary is increased at the rate of past inflation.
Check Retirement Balance
The thing that you must do before the fifth retirement is to check the entire balance of the pension plan.
Employees usually get pension benefits from the company or the employer.
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