Preparing yourself for retirement involves more than just building up your savings and applying for your federal retirement benefits. Other vital steps:
* Pay off debt. Before you retire, you’ll be better off if your credit card, mortgage, and other debts are paid off. The money you spend on debt repayment will eat into the amount you have left for other retirement pursuits.
* Keep up your health insurance. Even after you reach 65 and qualify for Medicare, you either should buy a Medigap policy as a supplement, sign up for a Medicare Advantage plan, or if you’re eligible to continue your FEHB coverage, as most retirees are, keep that and possibly consider switching to a lower cost plan. Medicare has many gaps (deductibles, coinsurance, vision care, hearing aids, etc.) that need to be covered. Second-payer plans like FEHB fill many of those gaps.
* You should investigate long-term care insurance. This can be expensive, purchased at relatively older ages, but ask yourself how you would pay for an extended period in which you, your spouse or both would need living assistance—at-home assistance, in an assisted living community or in a nursing home.
* Don’t neglect other coverage. You’ll still need adequate home and auto insurance; excess liability (“umbrella”) coverage also is vital. Ask about discounts for seniors, which are offered by many companies.