After working for decades, getting ready to become a retiree often feels overwhelming. In addition to mentally preparing yourself, you will also need to get your finances ready for the next few decades. Taking the time to make plans now will give you peace of mind knowing that you will be financially stable for many years to come.
Aggressively Settle Your Debts
It might be tempting to continue dumping as much money as possible into your retirement accounts, but it is almost always more efficient to settle your debts first. Unless you and your financial manager have decided that your retirement accounts are earning much more interest than your current debt, you should try to settle your other loans first. Entering into retirement with absolutely no debt can be one of the most freeing situations you will ever experience.
See Also: What Happens to Debts Of A Deceased Person?
Redirect All the Cash You Can
As soon as you are done paying off all the debt you have, you should redirect as much of your money as possible into your retirement accounts. This is especially important if you work for a company that is offering to match your contributions. Making a few smaller sacrifices while you are working will help you build a much bigger nest egg for the future. Many people reroute annual bonuses, raises, and tax refunds directly into their most profitable retirement accounts.
Even if your life slows down after you retire, there are still going to be some emergencies. Unfortunately, those emergencies are much different when you are on a fixed income. While many people drain their rainy-day funds just before retirement, you should consider holding onto it. Having a few thousand dollars in a secure account could help you cover unexpected medical bills or repair work if your vehicle breaks down.
See Also: Are Men Or Women More Successful At Saving For Retirement?
Get Your Estate Settled
Whenever you are getting ready to make a major change in your life, you should always revisit your estate. Most employees who are getting ready to retire will need to speak with a Probate Lawyer to discuss any changes that need to be made to their will. These legal professionals can ensure that your assets will be passed along smoothly and without any major disputes if you pass away.
There is no single financial tactic that will work for every retiree, and that is why you must do your own research in the years leading up to your retirement in order to build wealth and reduce your debts as quickly as possible.
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Author: Eileen O'Shanassy
Eileen O'Shanassy is a freelance writer and blogger based out of Flagstaff, AZ. She writes on a variety of topics and loves to research and write. She enjoys baking, biking, and kayaking. Check here for more information on getting better home technology and security. Check out Eileen's Twitter @eileenoshanassy.
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