5 Steps You Need to Take to Prepare for a Retirement
When should you prepare for retirement? The answer may surprise you. Quite simply, you start today.
Ideally, the best time to think about retirement is years before you’re ready to retire. Why? Because there are specific steps you’re going to need to carry out. Let’s look at those in more detail.
Map Out Your Retirement
Do you have a plan as to what your retirement will be like for you? Do you want to travel? Still work part-time? Explore a new interest? Move somewhere else entirely? It’s almost impossible to plan for what you don’t know. Taking steps now to lay out on paper what you want to do next will go a long way toward helping you prepare now.
Address Your Current Budget
Ideally, you’ve been saving for retirement already. Even if you haven’t, how does your current budget allow you to lay funds aside now for the future? Are you in a position to increase this amount? Are there things you’re spending on now, which could perhaps be cut out to allow for more funds for the future? Exploring these questions will help you figure out just where your money is going, and where you need it to go.
Consider Your Income
When you’re retired, what can you count on for income to help support you? Count social security, your pension, and whatever income you have from investments. Is this going to be enough for the lifestyle you desire? Are all of these secure income streams?
Look at Your Debt
At the same time, you need to balance your debt. The best plan? Be sure to pay off things like your car and any high-interest loans before you retire. It’s up to you whether you want to still deal with a mortgage or not. If you expect to have debt, be sure to subtract those numbers from your income so you have a better idea of what money you’ll need for the retirement you desire.
Rework Your Portfolio
Some investment plans might not be as practical as others when you hit retirement age. You might want to reconsider high-risk investments or ones that payout far in the future. This is where you need to sit down and talk with a financial planner or investment counselor to make sure you’re getting the most bang for your buck when you need it most.
Don’t leave things to the last minute. After all, you want to enjoy your retirement, not spend it scrambling for the means to get by.
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