Navigating Retirement: Tips for Pursuing Financial Independence

Jeanne Tackett |

As you approach the age of retirement, you may find yourself thinking about your financial future during your retired years. After years of diligently saving for your retirement, it’s important to begin planning the intricate details of your financial situation for our post-retirement life. This is your chance to meticulously consider the crucial aspects of your financial independence during retirement. Keep reading for valuable tips on navigating the financial aspects of retirement.

Social Security Benefits

In the United States, Social Security benefits are available to those who have earned a minimum of 40 social security credits during their working years. Accumulating these credits is essential to qualify for these benefits in retirement, which can provide valuable income to supplement your retirement savings. The earliest age you can begin receiving Social Security benefits is 62, but the amount you receive will be reduced if you begin before your full retirement age. On the other hand, if you delay taking benefits until after your full retirement age, your benefit amount will increase. In fact, delaying until age 70 can result in a significant increase in your benefit amount, making it a smart move for those who can afford to wait. It's important to note that the amount of your Social Security benefit is directly tied to the number of credits you have earned over your working career.


How Much You Will Need To Retire

Prior to retiring, it’s important to have a substantial amount of savings to support yourself during your retired years, which could last anywhere from 20 to 30 years. Roughly a decade before retiring, you should start assessing whether you have enough savings and take advantage of this final period of working to increase your retirement savings.

There is not a clear cut amount of funds that you will need to live off of in retirement; it is a case by case basis. The primary factor that needs to be involved in deciding how much you need for retirement is your current income. One common rule of thumb for a final nest egg amount is 10 to 12 times your annual income at retirement age. This is easier when you’re closer to retirement since you can easily estimate what your income will be in your final year of work.



For your working career, you probably have used the health insurance that your employer offers. Once you retire, you no longer have an employer sponsored health insurance program to partake in. In lieu of employer health insurance, you can sign up for Medicare if you do not want to use private health insurance. Before retiring, you should know what to expect about Medicare.

Medicare has precise enrollment procedures and periods. You are first eligible to sign up for Medicare 3 months before you turn 65 and have until 3 months after the month you turn 65. If you miss that enrollment window, there is a general enrollment period annually between January 1st and March 31st. Initially, you will sign up for Part A and Part B, then have options to choose Original Medicare or Medicare Advantage, as well as opting into Part C and Part D.


Healthcare Expenses

Even with Medicare, you will experience healthcare costs that will be paid out of pocket. According to Fidelity, the average 65 year old couple retiring will incur $315,000 in healthcare related expenses throughout their retirement. Aside from the funds that you have to live off of in retirement, you should also have money set aside specifically for health care costs. Inevitably as you get older, you will incur more medical expenses due to more medical problems related to aging.

For savings specifically for health care costs, you can save funds in several different accounts. One option is a Health Savings Account if you have a high deductible health insurance plan through your employer. Another option is to utilize a Roth IRA since these types of retirement accounts do not have required minimum distributions so you can withdraw funds as needed.

Retirement planning and your finances during retirement can be difficult to navigate financially without the guidance of an experienced financial advisor. To help you navigate the financial side of retirement, have an advisor from Total Clarity Wealth Management on your side. It’s never too early to start planning for retirement, so schedule a consultation today.

A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply.