5 Financial Tips to Keep in Mind Before Retiring

5 FINANCIAL TIPS T O K E E P I N M I N D B E F O R E R E T I R I N G

IF YOU ARE IN YOUR 50S Now is a good time to start thinking about what you want your life to look like in retirement and start creating a plan. At this point, you are also more likely to be in a better financial position than you were fresh out of college; the kids are out of the house and your mortgage may be close to being paid off.

Now is as good a time as ever to start saving and investing in retirement.

CREATE A BUDGET

SET YOURSELF UP WITH A STRONG FOUNDATION TO SUPPORT YOU DURING RETIREMENT.

Create a new budget. Adjust the budget you currently have for how you think it will differ in retirement.

Take into account any changes in your finances, like mortgage payments - will they decrease or be non-existent? When you're creating this budget, it's best to be brutally honest with yourself about what you're going to spend. You will most likely want to maintain the same standard of living, so don't be frugal in your financial planning decisions.

Meeting with a qualified financial professional will help you better assess your financial position for retirement. They will be able to set you up with a detailed model of what your finances will look like by the time you retire.

To do this, they will review your portfolio and assets against a variety of variables, including market performance, inflation and tax rates, to determine the likelihood that you will have the income you need.

SCHEDULE A CONSULTATI ON

REALLOCATE YOUR INVESTMENTS Talking to your financial advisor about adjusting your investments to reduce your risk may be in your best interest.

There are options, like Indexed Universal life insurance that provides a return of 0% to 12%, based on how the index you are tracking is performing. While there are advantages and disadvantages to this type of plan, it provides you with more predictable returns and less volatility as you get closer to retiring.

DOWN SIZE

IF YOU KNOW THAT YOU ARE GOING TO WANT TO SELL YOUR HOME AND MOVE INTO A SMALLER SPACE, EVALUATE IF DOING SO SOONER THAN LATER WILL BE MORE ADVANTAGEOUS FOR YOU. IF DOWNSIZING NOW WOULD ALLOW YOU TO INVEST SOME EXTRA MONEY INTO YOUR SAVINGS, IT MAY BE IN YOUR BEST INTEREST TO START THE PROCESS.

Saving as much as you can the last few years before retiring is a smart choice and has some benefits too.

Once you are over the age of 50, there are catch-up provisions provided when contributing to your 401k plan.

While at age 49 you can only contribute $18K a year, you can contribute $24K a year once you turn 50. There are also saving options that may provide insurance products with tax-free growth and withdrawal in retirement for those that cannot contribute to a 401k or IRA.

CONTINUE SAVING

THANK YOU FOR WATCHING! DAVIDSCHANG.NET