According to US News, Houston, Texas is one of the best places in the United States to retire. There are a number of reasons why, including affordable housing, no taxes on necessities like groceries and medication, as well as no taxes on the income streams retirees rely on like social security, IRAs, pension plans, and 401(k)s. There’s also plenty for retirees to do in the Houston area as they enjoy their golden years.
If you’re looking toward your Houston retirement in the next year, here are some retirement strategies to help ensure your financial planning and outlook are up to the task.
Prepare Mentally and Emotionally for Retirement
While most retirement plans focus solely on the advice of a financial advisor, it’s important to mentally and emotionally prepare to leave the workforce as well. After decades working, leaving the structure, meaning, and camaraderie of a job or career can be difficult. If you haven’t yet decided how you’ll fill your time or provide yourself with a sense of purpose, it’s time to do so.
Leverage Your House
If you’re looking to retire and you’re a homeowner — even if you don’t own your home outright — there’s a lot to think about regarding your Houston retirement strategy. Is your home’s layout and size amenable to your changing needs as you age? Should you sell and move, relying on your home equity to fund part of your retirement? Is a reverse mortgage right for you? Whether you downsize or stay put, just make sure your home is factored into your financial plan.
Draw Up a Budget
Whether you’re 70 and still reluctant to retire or you’re looking for information on how to retire at 55, you’re going to need a realistic budget when you finally do step away from a regular paycheck. Especially if you’re hoping to retire early — which might mean 30 or more years of paycheck-free living — adjusting your spending is key to success. Be sure to take into account mundane monthly costs like health care and life insurance, and not just the three-month tour of Europe you've been waiting your whole life to take.
Plan to Make Your Retirement Savings Last
Perhaps the most important strategy for retiring in 2021 is to have a plan that will help make sure your savings lasts. In addition to knowing how much of your retirement savings you’ll spend each year, be willing to be flexible. Some years may bring unexpected expenses, so you may need to forego a vacation or take on a part-time job. While the future will likely have some volatility, putting a plan in place will help make sure your retirement income can go the distance.
If you’re hoping to retire in Houston in 2021, you can make your dream a reality. Follow these strategies, and if you have any questions, reach out to TDECU for expert advice on retirement planning.