The year leading up to your retirement date can be an exciting one, but it’s also the time to make sure you’re financially ready for that next step. If you’re planning to end your career in 2026, here are three essential moves to make right now.
1. Check your asset allocation
Today’s market is particularly volatile, which makes retiring in 2026 potentially risky. However, with the right portfolio composition, you can retire with confidence, even in the midst of a turbulent market.
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As a general rule, it’s a good idea to shift away from stocks (though not completely) once you’re getting close to retirement. That’s an especially good idea now, given that we don’t know what’s in store for the market.
Take a look at your portfolio and see what percentage of your assets are in the stock market. If it’s more than 60%, you may want to scale back. But if you have a decent amount of savings and plenty of assets outside the stock market, you may be just fine to move forward with your retirement plans since there are other assets you can cash out that may not be prone to wild swings.
2. Stockpile some cash
The coming year could be a rocky one as far as the stock market and economy go. Experts are increasingly sounding recession warnings.
The good news is that if you’re already planning to retire, you don’t necessarily have to stress about losing your job. But a prolonged market downturn could be problematic for your portfolio. That’s why, in addition to checking your portfolio’s asset allocation, it’s important to stockpile a decent chunk of cash.
In general, it’s smart to have at least a year’s worth of living expenses in cash. However, given what may be in store, it could pay to have more like two years’ worth of cash on hand — or even three years, if you want that extra protection.
The good news is that, because interest rates are still strong, you can earn a decent return in a high-yield savings account. A certificate of deposit (CD) ladder could also be a good bet, provided you also keep a decent chunk of cash outside of a CD for immediate access.
3. Make sure you know what to expect from Social Security
If you’ll be retiring during a potentially turbulent market, you may want to leave your portfolio untouched for as long as possible, and that could mean that you’ll want to claim Social Security right away. Just make sure you understand what filing for benefits immediately means for you.
A good way to know what to expect from Social Security is to create an account on SSA.gov and read your most recent earnings statement, which will tell you what monthly benefit to expect. Do keep in mind that if you claim Social Security before reaching full retirement age, you’ll be looking at a reduced monthly benefit.
You may be both excited and nervous about your upcoming retirement, and that’s understandable. But if you make these key moves, you should hopefully be able to feel better about the financial side of things.
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