4 Steps to Take When Getting Serious About Retirement
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Nearing retirement can be stressful. Will you have enough money? Will you have to go back to work if plans fail? To help rid yourself of this stress, planning can go a long way. So, what are the four steps you can take when getting really serious about retirement?
Pay Off Any Lingering Debt
One of the most dangerous things to bring into retirement is debt. This is because most retirees must operate on a fixed income. The more debt you have going into retirement, the less expendable income you will have on a day to day basis. Ridding yourself of all credit car, personal loan, and mortgage debts prior to retirement is a great way to set yourself up for success down the road.
Have A Will Created
Although many of us don’t like to talk about it, having a will in place for when we pass away is a great way to reduce stress and avoid any confusion over finances and assets. Drafting up a will while you are still working is a great way to rest easy at night knowing that if anything should ever happen to you, your family is taken care of.
Do A Dry Run Of Your Retirement Budget
Typically, budgets in retirement are different from budgets while someone is working. This is because your daily activities will likely change. Without a daily commute, the amount you spend on gas may go down significantly. With more time on your hands, you may be able to cook at home more often. This often leads to spending less in retirement. Unfortunately, many view this lower budget as a worry. To help assuage these fears, complete a dry run where you attempt to stick to your proposed retirement budget for a full month. This way, you know it can be done once you’ve clocked in for the final time.
Speak With A Financial Planner
Retirement planning can be highly complicated, especially from a taxation standpoint. Should you draw from your pension, tax advantaged accounts, or brokerage accounts first? While most people get lost in the details, financial planners organize questions and answers like these for a living. Speaking with one, even for a single visit, can greatly improve your tax situation after retirement.
Retirement should be the most relaxing time of your life. To ensure this is the case, be sure to have your financial situation in order well before the big day arrives.
Emma Sturgis is a freelance writer based out of Boston, MA. She writes most often on health and education. When not writing, she enjoys reading and watching film noir. Say hi on Twitter @EmmaSturgis2
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