At 55 years old, you may begin to eye retirement more closely, however, there are money moves you can make to guarantee a stress-free and bright retirement. Here are 7 cunning money moves that you should know as you hit 55 years.
1. Update Your Budget/ Create A Budget
The fact that you are supposed to update or create a budget means that you should have one. It is one of the things that will determine how you spend your money and the amount available for saving. You need to ensure that expenses are as minimal as possible while most of the earnings go towards saving. For those who do not have a budget, it is high time you create one. Start by listing your expenses, ensuring that you allocate the essential spending first. You should also have a figure on the amount you want to save. One of the approaches to ensuring that you reach your savings goals is to save first and then spend on the remaining amount. With such an approach you are assured of saving towards your retirements
2. Calculate Your Retirement Savings And Needs
To ascertain the amount which needs to be saved, it is important that you calculate the retirement savings and needs. The amount saved should allow you to continue with the same or even better lifestyle. To get the correct amount, you need to adjust the current prices with inflation. This might not be easy; therefore hiring a financial consultant to help you with this would be the most ideal thing.
3. Set Up A Savings Plan And Savings Accounts
Having established the retirement savings and needs, you need to draw up a plan on how to reach your goals and targets. A saving plan should indicate the objectives and a map on how you will achieve this. One way of doing this is having a separate saving account, with such it will be easier to monitor progress.
4. Review Your Mortgage
While paying off the mortgage before you retire may be a good idea, to many people it may not be possible. Retirement advisers say that tax-deferred savings will offer a better return than paying down the house mortgage. Work on areas that will give you an advantage, reviewing the amount you pay on your mortgage is one of those things that can help increase your retirement savings.
5. Consolidate And Eliminate All Debt
Debt is one thing that can derail your saving endeavors. Try to pay off your debt, speed the repayment and if that is not possible to have all your debts consolidated. Debt consolidation involves replacing certain debts with
other, at a lower interest rate. A good example is where you take a low-interest loan to pay off a high charging interest loan. With such a plan you will save yourself a substantial amount, money that can be saved or used to pay off other debts. Also transforming credit card loans into other forms of debts can also save you a substantial amount of money.
6. Investing Options - Diversify Your Portfolio
Part of the future retirement plans should be investments. With this, you are assured of growth. Ensure that you diversify the investment portfolio. Put your money in ventures that will give good returns, avoid get rich quick schemes as you may end up losing all your investments. To do this, you need to consult investment experts and also research the areas that can be beneficial as far as your retirement needs are concerned.
7. Protect Your Family for the Future
Without a job or income, caring for your family may be hard. You need to ensure that they are protected from eventualities. This can be achieved by taking the necessary insurances, be it medical, life, or education, among others.
With these and more retirement preparation tips, you are assured of a stable, stress-free future.
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