As a seasoned educator, you may have started thinking about retirement. While time is still on your side, it is important to act quickly to ensure you are set up for retirement when it does come.
Here are some tips for retirement planning in your 40s:
Know Your Retirement Account – Your CalSTRS pension or CalPERS retirement benefits plan is the foundation for your retirement. It is important to educate yourself on how it works and how it will support you during retirement.
Keep Track of All Retirement Accounts – If you have changed jobs and employers, you may have several retirement accounts. It is important to keep track of them all and consider rolling over the account balance from each into your current employer’s retirement plan. If you are looking for lost accounts, search the Pension Benefit Guaranty Corporation.
Create a Savings Strategy – It is important to know how much you will need to save for retirement. In most cases, educators may need 90 to 100 percent of their pre-retirement income to maintain their current standard of living once they retirement. Luckily, you still have time on your side. Work with an expert to determine the amount you need to save and the best options for achieving it.
Rebalance Your Investments – While it may be tempting to leave your investments as-is, it is crucial that you occasionally rebalance them to ensure your nest egg continues to grow.
Update Your Estate Plan – As you age, it is important to keep your estate plan up-to-date. Ensure that your beneficiaries are updated on assets that are not controlled by your will.
Know About Medical Benefits for Retirees – It is important to know if your employer will cover you and your spouse once you retire. If not, you will need a plan to address coverage once you have retired.
Consider Long-Term Care Insurance – Consider purchasing a long-term care insurance plan now to ensure your nest egg is protected and preserved later in life. This type of plan can include coverage for assisted living, home health care and even nursing home costs that you or your family would normally have to pay out of pocket.
Know Your Social Security Earnings – Determine if you have Social Security-eligible earnings through another job or your spouse, and how it will impact your retirement. It is important to understand that your Social Security Benefit may be reduced if you are a CalSTRS member.