The older most of us get, the more most of us start thinking about our retirement. While it’s important for us all to make plans along the way to get our finances in order for when we retire, those last 10 years before we do are the most critical. Steps that you take during that last decade before you retire can have significant implications on the type of life that you’re able to live once you end your career.
One of the biggest mistakes that prospective North Carolina retirees make is that they fail to plan for what they plan to do once they retire including calculating their income and expenses.
Many financial analysts note that most retirees spend at least 4 percent of their investment portfolio on their annual expenses. While clothing and commuting costs may go down in retirement, an individual’s health costs or travel expenses may increase.
Most financial planners would recommend for anyone inching toward retirement to work to reduce their debt. Using cash instead of using a card will save you from having to pay interest, something that can unnecessarily chip away at your retirement savings.
Another recommendation that most financial planners would make would be to diversify your assets to include a better mix of mutual funds, stocks and bonds, even though some of these carry more significant risk than others.
They’d also advise you to up your contributions to your 401(k) and IRA retirement plans. This may include increasing what’s taken out to make sure that your Statesville employer is matching it. Also, once you turn 50, you may want to learn more about making higher contributions under catch-up rules.
If you change jobs during the last decade before you plan to retire, then you’ll want to consider rolling over your IRA or 401(k) accounts.
You’ll also want to start honing in on where you plan to live in retirement. This may involve you moving to a condo in another state with lower property taxes or staying in your home and cutting your budget elsewhere.
Estate planning is a broad field that may include drafting a will, forming a trust, executing powers of attorney or preserving your assets or eligibility for government benefits. An attorney can provide sound advice about how you can go about protecting your assets and your beneficiaries.