Saving for retirement is often put on hold by most people who feel they have lots of time to start planning and saving later. While it is never too soon to start saving for retirement for any age group, those who fall within the age range of 50-60 are more acutely aware of its importance, as retirement is imminent. As such, age 50 to 60 is a critical period to get a realistic assessment of how financially prepared you are for retirement.
Assess Whether You’re Financially Ready for Retirement
Assessing your financial readiness will help you to determine whether you have a projected shortfall and whether you need to modify your retirement strategies, goals and objectives. To do so, you will need to gather a few things, which include details of all of your bank accounts, your savings, pension funds etc., as well as the amount of income you project you will need during your retirement period. A good lifestyle financial planner will be able to help you determine how much the lifestyle you want will actually cost you. How great would it be to know you are in a position to retire 2-3 years before you ever thought you could?
Saving for retirement is a function that is often put on hold by those who feel they have sufficient time to start planning and saving later. While it is never too soon to start saving for retirement for any age group, those who fall within the age range of 55-64 are more acutely aware of its importance, as retirement is imminent. As such, age 55 to 64 is a critical period to get a realistic assessment of how financially prepared you are for retirement.
2. Re-Assess Your Portfolio
How many times have you heard someone lost a large portion of the money or worst lost everything in their pension just before they were planning to retire? With the possibility of receiving large returns on your investment, the stock market can be attractive, especially if you are starting late. However, along with the possibility of a high return comes the possibility of losing most – if not all – of your initial investment. As such, the closer you get to retirement, the more conservative you will want to be with your investments because there is less time to recuperate losses. Working with a competent financial planner becomes even more important at this stage, as you need to minimize risk and maximize returns more than you would if you had started earlier.
3. Pay Off High Interest Debts
High interest debts can have a negative impact on your ability to save; the amount you pay in interest reduces the amount you have available to save for retirement. Consider whether it makes sense to transfer high interest loan balances, including credit cards, to an account with lower interest rates. If you decide to pay off high interest loan balances, take care not to fall into the trap of recreating outstanding balances under those accounts.
Having your retirement savings on track can provide great satisfaction; however, it is important to continue on that path and increase your savings where you can. Saving more than you are projected to need will help to cover any unexpected expenses. If your savings are behind schedule, don’t lose heart. Instead, play catch-up where you can and consider revising the lifestyle you planned to live during retirement.