With retirement on the horizon you should perhaps pause for a moment and decide whether you are ready. Temperamentally and physically you may certainly be well prepared but what about the finances? It is a strange time at present; recession has faded and interest rates are low. Real estate has certainly recovered but it is unlikely that there will ever again be the growth of the opening years of the 21st Century. Some of that growth has not even returned in places.
You need to have a plan for the coming years and it should reflect the current situation. If you have not updated it over the years you may be in trouble. Everything should be written down and scrutinized; income, health care, investments, tax and estate. The document needs constant monitoring as circumstances chance. If you don’t have a written plan then get one done and use financial experts to help to prepare it.
So much these days depends upon a personal credit report; certainly the ability to borrow money. The report should reflect all your dealings with financial institutions, credit card and energy companies. Indeed it should have an entry for each transaction you have settling bills. It is important that it does not contain any inaccuracies which are to your disadvantage.
Identity theft and fraud are both realities in the modern world; they may not be common but everyone should be on their guard.
Ideally you will have built up an emergency fund. It is not always possible if you still have a mortgage and you are increasing your investment to provide for retirement. It is best in cash rather than in investments which are subject to the vagaries of the market. You may not be getting much interest on the cash but at least you know it is actually there and locked away from ‘harm.’ It should not be locked into an account whereby it is not immediately available. It may be just the equivalent of three months’ regular expenditure but it does provide breathing space.
Most people have to make the vast majority of their retirement provision from their own pockets. Employees have gradually pulled back from the provision of retirement and health funds. There are current limits on what can be put into such accounts. The current figure is $17,500 annually, $5,000 more for the over 50s. It is not always possible to deposit such figures; you should try to put as much as possible. There are tax advantages as an extra incentive and it is worth asking a tax expert for advice so that every allowance is taken.
Those who have money invested should be looking at those investments, especially in the final years before retirement. If investments are short term by the nature of wanting to liquidize assets upon retirement it is unwise to have money in anything that is regarded as risky. At times it may be worth winding down investment gradually putting the money into the retirement plan if you are unable to put the maximum allowed each year into that account.
There is plenty to do as retirement approaches. For many people their monthly income falls considerably. If that is the case there is even more of a need to sit down and look at the picture. Every case is unique but those people whose careers have been finance and ‘best advice’ are there to offer help. They may come up with ideas that you have never considered and given that risks will never be contemplated they may provide you with suggestions to improve the quality of your life in retirement.