Future Frame of Mind: How to Plan for Your Finances in Old Age
It’s very important to start planning early for your financial stability in your older years. Retirement can mean you have to cut back and only use what you’ve been able to save in your working years. A lot of retirees know that starting to look to your future now will make all the difference later on when you have to let go of your working wages. If you start now, you’ll be well prepared for almost any situation, no matter what your age.
DEBT FREE
The last thing you want to be bringing into the second half of your life is the burden of debt. Pay off your credit card debt now, and do not carry a balance if you can. It is recommended you keep your credit cards open and use them every now and then to keep them in good standing. They can be great to have in an emergency, and a good management of your credit card portfolio can keep your credit score sky high where it should be in your golden years.
NEST EGGS READY
You MUST start contributing to a 401k account at work. That is basically free money you can accumulate to sustain you after you retire. You’ll also want to open a separate Roth IRA account to put extra money into for retirement. You then need two savings accounts in two different banks for security reasons. You never know when something may happen to one of your institutions. One should be your emergency fund with one year of living expenses in it, and must be absolutely liquid and available to you quickly. Your second savings account should be anything that’s leftover. You could use this as an investment account if you really want to get the most out of your money.
LARGE ITEMS OWNED OUTRIGHT
Before you retire, ensure that your home is completely paid off. You don’t need to have a mortgage to pay after you retire, and it will be much easier without one. You should have no car payment either. Baby boomers at Sunshine Retirement homes say the best way to pay these off is to have a payment plan in place early on.
EXCELLENT INSURANCE AND WILLS
There are many types of insurance that could come in handy as you get older. Disability, long term care, life, etc. If something happens to you, these policies will care for those you leave behind. Your spouse needs one too, so it will work both ways. A will needs to be constantly updated for the same reasons. Include who you want to be your power of attorney for when you can’t fend for yourself any longer.
By the time you retire, you should have enough money coming in or either stashed away, to cover every expense imaginable, including retirement or nursing homes. The practices you put into place today, can benefit you greatly in the years to come. Find more information over here about how you can start saving now.
Category: Financial Planning
