After many, many years of working hard and saving, you can finally see retirement starting to appear on the horizon. However, the years leading up to retirement age are not ones to sit back and relax in and hope it all works out. No – you need to be doing everything that you can to make sure that you have what you need to enjoy a comfortable retired lifestyle. Taking a close look at your income and any assets that you have well in advance of your target retirement date gives you enough time to make any necessary changes.
Obviously, you need to consider the sort of lifestyle that you want after you stop working. Perhaps you won’t actually stop working at all and will work part time or volunteer. Others may decide to follow their dreams and travel the world. Whatever path you choose to take, you need to ensure you have the financial resources to support it, and this is what we are going to explore in this article.
Ensure your income is diverse and that you are investing for growth
Stocks and shares obviously come with significant risks and can be tempting as you start to wind down to shy away from this form of investment. However, the growth that stocks may provide can be beneficial. Think about maintaining a mix of stocks, bonds, mutual funds, and other assets, as a diverse and well-balanced portfolio can help you weather economic downturns and potentially generate enough income to support you through a (hopefully!) long retirement.
It is also essential that you have an up to date will listing all of your assets in case the worst happens – there are WillTemplates online which can help you to do this.
Take advantage of retirement accounts.
If possible, increase your retirement contributions to the highest amount allowed in your IRA, 401(k) or other retirement plans that you may have. Aim to have enough in your 401(k) to qualify for any maximum matching contributions offered by your employer.
As you get nearer to retirement age, consolidate your accounts to simplify your investment management, which will give you a clearer idea of what retirement assets you have in place, It may also be worth combining IRAs of the same type with one institution and reviewing any 401(k)’s you have with previous employers.
Reduce your debts
Before you hit retirement age is the time to start accelerating your mortgage repayments so that the loan will be paid off sooner rather than later. Avoid incurring any new credit card debts by paying with cash for major purchases. By reducing existing debts and limiting new ones, you can minimize the amount of your retirement income that will be spent on interest payments.
It is never too late to get started when it comes to planning your retirement. When it is a decade or more away, it can feel like a distant event, but it will creep up on you. Planning carefully and setting realistic goals while time is on your side can help you to have the retirement that you have always dreamed of.