Washington County Weekend Post

GMTODAY.COM SUNDAY, OCTOBER 3, 2021 • WASHINGTON COUNTY POST • 3A Retirement is on the horizon for a significant number of people. Around 10,000 people retire each day in the United States, accord- ing to a study by Merrill Lynch and Age Wave, a con- sultancy studying the cul- tural and economic impacts of aging. But many soon-to- be retirees are not fully pre- pared for life after their work life ends. Shedding new light on this next chap- ter can make retirement something to look forward to even more. How retired are you? Retirement may no longer mean what it once did. Some retirees remove themselves entirely from the active employment market, while others prefer to keep at least one toe in the profes- sional water. Some retirees change fields and do part- time work. Others may vol- unteer their time without getting paid. Still, some choose to use retirement as an opportunity to spearhead a new business venture that may not have been possible beforehand. Retirees should reflect on their goals, as well as their finances, and make plans accordingly. Don't neglect health care Retiring may involve finding health insurance and preparing for other types of health care later in life. The U.S. Census Bureau says that employment-based insur- ance covered 55.4 percent of the population in 2015, the most recent years for figures, followed by Medicaid (19.5 percent) and Medicare (16 percent). Residents of other countries may be covered by government standardized health programs. It pays to know the rules of each plan to avoid unnecessary expens- es that can eat into retire- ment dollars. For those Americans who will be rely- ing solely on Medicare, find a counselor who can spell out the intricacies of the plan, or use the free tool on Medicare.gov. See retirement as a beginning, not an end Quite often soon-to-be retirees focus on the end of a career or the end of a stage in life without putting enough focus on the possi- bilities ahead. This is a prime time to find a new social network, travel, join a ministry, and much more. Choose your living space Retirement can be an opportunity to shed an old skin and try on a new one — especially as it pertains to housing. There are options to downsize for empty- nesters or even to secure resources to "age in place." According to United Income, a money management ser- vice, retirees should try out particular scenarios and locations prior to jumping in. Rent in a particular neighborhood, or house sit and try things on for size. Airbnb and other types of services can make this trial easy. A new outlook on retire- ment can open up a world of opportunities. Smart ways to embrace retirement Credit is defined as a cus- tomer obtaining services or products before payment with the trust that payment will be made in the future. Credit affords people pur- chasing power they would not have if they had to pay for something outright at the time of checkout. In addi- tion, credit enables men and women to finance expensive automobiles, buy homes or furnish those homes, con- tributing much to the foun- dation of a strong economy. A strong credit history and score is vital to personal finance. The steps people take concerning their finances can greatly affect their credit. Identifying the behaviors that may be detri- mental and those that are beneficial can help cus- tomers reevaluate their habits and improve their creditworthiness in the eyes of lenders. Payment history The financial advisement resource Credit Karma says one of the most important factors affecting credit scor- ing is payment history. Hav- ing a long history of making payments on time is essen- tial for a strong credit score. Missed payments and a repu- tation for paying late can drive ratings down. It can take some time to recover from late payments. Failure to recognize late or missed payments may result in bankruptcy or tax liens, which are a heavy black mark on credit. Credit utilization rate Credit utilization refers to the amount of credit you have available, based on credit card limits, compared to the amount of credit you're actually using by way of the balances on credit cards, advises the credit tracking company Experian. Lenders prefer to see ratios of around 30 percent or less. To calculate credit utiliza- tion rate, divide your credit card balance by your credit limit. So if your balance is $600 and your limit is $1000, that's a utilization rate of 60 percent. Number of accounts The number of open accounts you have affects your credit score. Scoring models often look back and consider how many accounts are open and if there are any outstanding balances. Length of credit history The length of your credit history is another factor that affects your score, according to Investopedia. Credit scoring takes into account the age of your old- est account, if you've used that account recently, as well as the average age of all your accounts, including the newest. Closed accounts can stay on your credit report for up to 10 years, but when an account closes, this will affect your credit history average. Credit scoring rubrics will determine just how the ratio of new to old accounts and frequency of use will impact your score. Credit scores are impor- tant. Understanding them further can help people secure their financial futures. What affects credit score?

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