Retirement sounds so nice and maybe still so far away, but it is never too early to begin planning for the wonderful stage of your life. Retirement is a time where you no longer work to maintain your life; you are able to rest and relax off the years you spent working to build up your retirement fund. If you have started planning your retirement there are things, you should do before you do take that major step. Here are just some of the topics to consider as you plan for your future.
Learn Where You Are Financially
Prepare a sheet that lists all of your assets and liabilities to see where you truly are financially. This list is known as a balance sheet. List your valuable possessions like cash, real estate, investments and other big-ticket items and their worth in one column. In another column, you need to list your debt and other monetary obligations. This will show you where you stand and where you need to improve.
Pay Off Debts
The best possible place to be before retirement is debt free. When you have debt, you should focus on getting this paid down as quickly as possible. Focus on your highest interest debts, tackling one at a time to pay it off with all the extra money you have, while making minimum payments on the other debts. Most important debts to rid yourself of are credit cards, then vehicles and lastly your mortgage since the interest rates on homes are typically very low compared to other debts.
Plan Future Living Needs
Figure out if you want to continue living in your current home or if you will downsize and live in a smaller community. If you would like to stay where you currently are, will any remodeling or updates need to be made to make living in your older age easier? It is recommended that doorknobs be changed out to level doorknobs for ease in opening and adjusting showers to make them more accessible – possibly installing a shower seat.
Another thing to consider is the maintenance level of your home – will you be able to maintain the physical requirements to clean and keep the yard up? If not, you have an option to hire that work out, but if that does not fit into your monetary budget, you may want to consider downsizing your home to something more manageable.
See a Financial Retirement Planner
Planning for retirement is an important step in life – it is really advisable to see a professional in helping you plan and look at your finances realistically to see what you can plan to live on in the future and if your lifestyle will need to be adjusted at all. They will also be able to help you with your investment portfolio to help make your money work for you and continue bringing money in while you are not working. They will also help you figure out what you will need in terms of healthcare and insurance coverage and what you will no longer need.
Prepare a Budget
Look realistically into what you will need to maintain your life. Consider monthly recurring bills like your mortgage, groceries, electric, and entertainment. Continue saving into an emergency fund, just in case. After you figure out a realistic budget you will be able to better determine what kind of travel, if any, will fit into your future.
This is a guest post. Susan Wright DMV is a vet and writer, sharing articles that provide financial tips that help keep expenses lower and within a strict budget.
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