Financial Decisions You Need to Make in 2016 to Get Ready for Retirement
Retirement is normally one of the last topics of conversation on anyone’s mind, especially when they are still in their 20s, 30s or even 40s. However, you will need to ensure that you and your loved ones will be taken care of once you reach retirement age, and this can only be done by making the right financial decisions well in advance.
Start Saving Now
If you have already started saving between 10% and 15% of your current income towards your golden years, well done. You are among the minority of folk who are taking their retirement seriously. However, if you have not started saving yet, you need to start now, regardless of how old you are. For example, saving $5,000 a year from the age of 25 will give you a retirement fund of almost $800,000. However, if you wait until your 40s to save this amount, you will only have around $285,000 to your name by the age of 65. Make compound interest your friend and start saving for your retirement today.
Purchase Sufficient Health Coverage
Before deciding when to retire, you will need to ensure that you have sufficient health coverage, regardless of whether you will qualify for Medicare or whether you will have to continue paying out of pocket for some of your healthcare costs. If you are still young but have been diagnosed with health conditions, you will most likely need to purchase additional coverage to ensure that these needs will continue to be fully met after retirement as well. The earlier you plan ahead with regards to your medical care, the more affordable it will be for you after retirement.
This is one of the most crucial steps to take in order to enjoy your retirement years. Debt has the ability to eat away at income and investments at an alarming rate, which can make the different between enjoying a comfortable retirement or having to scrimp and save to afford the bare essentials. Using the traditional debt snowball method will help you to eliminate your debt, which will in turn enable you to live as comfortably as possible. An added advantage is that when you have no debt to repay, you can increase the amount you are paying towards your retirement fund, which will help them grow quickly.
Prepare for the Unexpected
In the event of your death, you will need to know that surviving loved ones are going to be properly cared for. One of the best ways to do this is to ensure that you draw up your final will and testament as soon as possible. All of your assets, such as vehicles, retirement accounts, properties and savings accounts should be listed and your will should clearly stipulate what needs to be done with them or who should inherit them. It is also imperative that you advise your family on what should be done in the event that you suffer from a stroke or are diagnosed with other terminal conditions such as dementia, Alzheimer’s or cancer.
If you have been unsure of where to start with financial planning for your retirement years, get in touch with us today. We will help ensure that you will be able to retire as comfortably as possible.