The days toward which you’ve been working for so long are finally coming into view. Retirement can be a time of easygoing days spent doing what you want to do, as opposed to what you must do. That is, assuming you’ve got your finances in order. These financial tips for planning for retirement within the next ten years will help you figure out what you need to have the life you want.
Determine Your Probable Income
Ten years out from retirement should be far enough for you to accurately assess your post-career income. Calculate your Social Security, company pension, and 401(k) plan benefits.
Will you still work part-time or even full-time? Where are you with your investments?
The basic rule of thumb is that you’ll be okay with spending 4% of your investment portfolio annually without significantly disrupting your investments. Given where you are present, how much will that be? Will it be enough to support everything you hope to do?
If not, this is the time to do everything you can to get things flowing in that direction.
Decide Where You’ll Live
Some people will choose to stay in the home where they raised their families. Others will decide to move to places with more favorable weather, taxes, or some other personal benefit.
Considering this decision now will help you determine how much money you will need each month to live comfortably.
Selling a house and using some of the proceeds to purchase a smaller home could boost your nest egg considerably, especially if you move to a state with a low tax burden and minimal living costs.
The last thing you want to do in retirement is to use your hard-fought savings and investment income to make other people richer with interest payments. Do everything possible to retire all your credit card debt (especially) and any other financial obligations.
This might be a good time to investigate debt consolidation to see if that will help you accomplish this more quickly and for less money. It’s also a good idea to consult a company like Freedom Debt Relief to get debt relief tips for Floridians and people in other states.
Maximize Retirement Contributions
If you have yet to do so, now is the time to maximize your 401(k) contributions. This is especially true if your employer offers matching funds. Remember that you might be eligible to put even more cash away with minimal tax concerns if you’ve already turned 50.
Investment experts recommend consolidating IRAs and other retirement accounts in one institution to simplify your management efforts. Doing so can also help you better understand where you are. This is also a good time to work your way back through your career to ensure you know where all your 401(k) dollars are. Sometimes they didn’t get transferred when you moved to new places of employment.
Diversify Your Investments
With ten years to go, you still have time to take advantage of growth stocks before switching your portfolio to focus more on income-producing equities. Be careful to avoid going too aggressive, just in case the market turns south.
The Bottom Line
Your financial situation will give you more time to get things in order. Retirement can be costly, but preparing for it in advance can help you position yourself to be better suited to weather potential storms.