Are you prepared to retire? Do you have everything in order so you can retire? You do not need to hire a bunch of professionals to manage your retirement nest egg. But at some point we all do need to consult a qualified financial professional to make sure you are doing everything that you can to ensure your retirement is the best it can be. What do you need to do in order to achieve this and retire in the best possible way? Here are some simple but effective ways to ensure your retirement is the best it can be.
The first thing you need to do is give an honest assessment of where you stand today with regards to your retirement. What are your total assets? What are your total debts? If your mortgage is paid for or nearly paid for now is not the time to refinance or purchase a new home. It is also not the time to be buying new automobiles so fix the one that is paid for up and use it a few more years. The average person who is about to retire has an average balance of $250,000 in their retirement accounts and if you have a pension that is an added bonus that you can count on for a steady stream of income after you retire.
Now if you are a parent you have to not subsidize your children or their lifestyle. If you are retired or about to retire do not go into debt to fund your children’s college expenses let them do that as they will have longer to pay for them and they can do it during their peak earning years as compared to your retirement years. And after college do not let them move back home. Make them live on their own and support themselves to ensure you will keep on your retirement path. But if they do move back in with you at least charge them rent and share the expenses to teach them valuable life lessons on money and to help you out on your bills.
But if your children are out of college and out of the house it may be time to consider to downsize what you are currently in. If the house is paid for and you can afford the taxes and maintenance I really do not see the need to sell and downsize but the decision is really up to you and your family. But if your house is paid for and you can use the proceeds to pay cash for a smaller house that is more economical then it is something that really does need to be considered. Regardless of the real estate market if you sell a paid for house at a lower price than what it was a few years before remember you are likely to also be buying a new smaller house at a reduced price as well.
Another popular retirement plan is to go international and move to a foreign country. Latin America, certain European countries, Malaysia and Thailand are all popular locations for Americans to retire. Most of these countries have a local population that is respectful of their elders and are relatively safe. But before you pull up your roots and move international make sure you do your homework and due diligence.
Another way to reduce costs and save on your retirement funds is to look for free entertainment and use senior citizen discounts. Check out what is available for free where you live at the local library or community centers. Then if you do feel the need to get out of town look for cheap or free attractions within a few hours of your house where you can visit for the day and return home at night saving on a hotel stay. But if you do feel the need to travel look at AAA and AARP for discounts for its members. Also look into government subsidies for seniors that may be available as well. Do not be embarrassed to look into these programs as many are underutilized because people do not know about them or are afraid to ask.
How can you ensure you get the most of your retirement income? Be realistic and save before retirement and even in your retirement years to get the most out of your retirement nest egg.
The best way to preserve your retirement income is to eliminate as much of your debt before you retire as you can and avoid getting new debt after you retire. And in the event you cannot pay the debt off try to lock in the rate as a fixed interest rate rather than a variable rate in the event that rates rise which with them at all-time lows is very likely.
Evaluate your insurance needs. The amount of insurance you need in your pre-retirement years may very well be different than that of your retirement needs. As you approach retirement you need to assess what you really need in the way of life insurance. Also as you get older the need for long-term care insurance will increase but these are policies that it is better to buy when you may be a little younger than retirement age. And shop around and make sure all the insurance you get meets your needs and is affordable in your retirement years.
As I touched on above when you assess your situation you need to consider any pensions you may receive, social security, other streams of income you may receive and figure out what will need to come from retirement accounts and investments. Another thing that needs to be considered at the same time you assess your financial income streams are the tax consequences that you will face. I know we all think that we will be in lower tax brackets when we retire but at this point I am not sure if taxes will indeed be lower for people in their retirement years. In order to preserve your capital consider less traditional and liquid investments in exchange for security and higher yields, but do not chase yields stay with high grade safer investments.
Retirement does not have to be a scary situation if you properly plan for it now and do not wait until you are within five years of retiring. It is never too early to start planning for your retirement years if you want to have the best of your golden years.
