Almost anything in life will go a lot smoother and goals will be reached a lot easier if an adequate amount of time is set aside for planning. This is also true when it comes to the retirement years and taking the steps to make certain a person’s financial condition will remain solid. To enjoy a secure retirement, it is wise to consider the following 6 tips.
- Make the determination of what your assets and net worth are – Every asset, whether it be financial or non-financial, should be added up. Assets include businesses that are self-owned, homes and everything else that a person’s owns. It is also important to make a tally of everything that is owed.
A large amount of consideration should be put into ways that income can be created. This can be from selling or renting a home, moving in with other family members, renting rooms out, a home-equity loan or a reverse mortgage.
Another important step is to convert assets into income and streams of income must also be changed into assets. It can be helpful to remember that you will benefit from income coming in each month simply by changing assets into income. This is essential for benefitting from secure savings for retirement.
- Make sure insurance policies are in order – Determine the policies that you already have and make a determination of those you will need to get. These include life, health, auto, disability and homeowners insurance. Long-term care insurance is another policy that should also be considered, as we all know the need for this type of insurance often becomes essential as a person ages.
Life insurance policies are important to ensure the surviving spouse will be taken care of in the event that death occurs. The surviving spouse can use this money for income or it can be used for bequests.
- Compare retirement income with anticipated expenses – It is important to keep in mind that income needs can change throughout the retirement years. Not only should the minimum amount of income needed for retirement be considered but you will also want to consider the cost of extras. The difference in income requirements for essentials like insurance policies, food and housing can change drastically when things like discretionary expenses are figured in. In many cases, discretionary expenses for things like traveling will often need to be revised when guaranteed sources of income are used to plan for retirement.
- Compare total assets to needed retirement funds – This is a process that frequently takes a lot of revising. There are many different factors that are used to determine the current value of expenses. This should include things like inflation rates, date of expected retirement, life expectancy and investment returns after-taxes. When it is evident adjustments need to be made there are many things that can be considered. Part-time work may be required, expenses may need to be adjusted or the expected retirement date may need to be delayed.
- Investments – While making investments can be extremely beneficial for the retirement years, it is important to only invest in items that are not much greater than the risk tolerance.
- Stay current with your plan – Health care needs, investment returns and many other elements can change drastically in just a year’s time. For this reason, a retirement plan should be reviewed on a regular basis and kept current.