Moves To Make As You Near Retirement
As you approach the time when you will leave the workforce for good, budgeting will be extremely important. Before officially retiring, there are certain moves you should make to ensure you will be successful.
No. 1 – Determine where you will live
When figuring out how much money you are able to withdraw from retirement accounts each year, your place of residence will be a major factor. For example, you may want to stay in your current home, but it can also be beneficial to downsize if you don’t need so much space any longer. Selling your house and moving somewhere smaller can give your more money, but you also need to factor in the state you live in. Certain areas will be cheaper than others based on property taxes and other expenses, so be sure to account for all the variables when choosing a location.
No. 2 – Increase your savings
Perhaps the biggest fear in retirement is running out of money. For this reason, it is recommended that you save more than in previous years. This is the last time you will be able to put money away while earning a full-time income, so you need to be sure to take advantage. If necessary, you may even want to consider living below your means and sacrificing certain luxuries at this time, so you don’t have to do so in retirement.
No. 3 – Eliminate all debt
Carrying loads of credit card debt into retirement is one of the biggest mistakes people make. Your high balances, and interest being charged, bleed money from your nest egg. To avoid such a situation, you may want to consider accelerating your debt repayment in the years leading up to retirement, so you don’t have to deal with the burden when you are no longer working.
No. 4 – Meet with a financial planner
Just because you were able to save a bunch of money for retirement, doesn’t mean you can budget correctly. For this reason, it wouldn’t be a bad idea to sit down with a professional who has experience with financial planning for retirees. While they may not have all the answers, you could certainly benefit from someone informing you of a withdrawal rate that allows you to avoid outliving your nest egg.
April Lewis-Parks has more than 15 years of experience in the financial sector, she is a certified financial counselor, and a consumer affairs advocate. As the director of education and public relations for Consolidated Credit she is dedicated to generating awareness about personal finance issues and acts as their consumer affairs advocate. As host the of MissMoneyBee.com, she promotes financial education and offers timely and informative personal finance articles to educate the public. April’s promotional efforts can be seen in past issues of the New York Times, Washington Post, Newsday, Consumer Reports, the Business Journals, Money Magazine, Glamour, Cosmopolitan, Family Circle, among others. Connect with April on Google+.