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10 Steps to Get You Ready for Retirement

Start planning now for your ideal retirement

Step 4: Determine When to Collect Social Security

(Hint: Later Is Better!)

Wouldn't it be nice if you saved and invested enough to enjoy financial freedom during retirement? Perhaps you did but for many that's not reality. Most of us will need the Social Security benefit we'll receive — both to pay for basic essentials and to support our retirement dreams. The age at which you choose to start collecting Social Security will have a direct impact on how much you'll get in monthly benefits. The longer you wait to claim Social Security, the greater the benefit for you and your family.

Consider this: A widow or widower whose spouse claimed Social Security at full retirement age or older gets 100 percent of the benefits. A widow or widower whose spouse claimed benefits early gets 71 percent to 99 percent, depending on when the spouse began claiming. If you wait to claim, you'll also be eligible for delayed retirement credits, which give you an increase in benefits each year until you reach age 70. Whether you are married, single, widowed or divorced, it usually pays to wait to claim. AARP's Social Security Benefits Calculator will show you when it's best to claim.

Step 5: Network Through Social Media and Other Methods

You need to build and maintain your network even in retirement. Use networking opportunities to showcase your talents. It's OK to brag about yourself to those who might help you fulfill your retirement dreams.

Include a networking strategy in your retirement plan. It may involve spending an hour a day on Twitter or LinkedIn "conversing" with people who share your skills and interests, or starting a morning meetup group at a local coffee shop to discuss ideas with other soon-to-be retirees. Such strategies will build relationships that in turn can grow your network. Also, be prepared to have clear, direct answers to such questions as "How can you use your talents and experience to contribute part time to an organization or cause?" The more socially active you are — online and offline — the more opportunities you are likely to create for yourself.

Step 6: Decide How Much You Want (or Need) to Work

This is the classic cost-benefit equation: Unless you are financially set for life, you will have to either stretch limited money and give up some retirement dreams or stay in the workforce (in some capacity) to help pay for those dreams. As you write down your retirement goals, take into consideration how much work is necessary.

In the previous step, you were encouraged to look at your interests. But you should consider your lifestyle and preferences, too. "Work" will mean different things to different people in retirement. Either way, to ensure you successfully reach your goals, you'll have to decide how much time you want (or need) to spend at a job. Don't wait until after retirement to make the decision. Weigh right now the pros and cons of working — including how many hours per week. The sooner you get comfortable with this decision, the more secure you will be in your retirement planning.

Step 7: Create a Retirement Budget

Your budget needs to include:

Start by tracking your income and expenses for a couple of months. Next, figure out how much money you'll need in retirement to support your chosen lifestyle. You'll also need to do a financial checkup of your investments. Make sure you are diversifying your money into multiple investments, investing in things you understand and going with those investments that won't cost you a ton in fees. If you are carrying debt, make sure your budget includes monthly payments to knock it down. Once you have a budget you know you can stick to, start putting it into action. AARP's Retirement Calculator can help you take a deeper look at the numbers.

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