So, you’re getting on in your years and now retirement is just around the corner. That was pretty quick, wasn’t it? You’re probably going through a lot of different emotions around leaving your career for good, but your work isn’t over yet. Although you’re out of work, you still need to look out for yourself. Here are a few important steps to ensure the best retirement possible.
If you haven’t already, start planning. The better your plan for retirement, the smoother the transition will be. If you’re in middle age, you should have started planning yesterday! Start off by determining your net worth (total assets minus debt). When you first sit down to do this, you might get a nasty shock. This is especially true when you consider the value of your home minus the mortgage you still need to pay off. In situations like these, you may need to release equity or take another big financial step. You really don’t want these kinds of things creeping up on you, so start building your nest egg today. Get your affairs in order soon, and you’ll have less hassle later in the process.
If you’re still working, look into any retirement plans your company is running. In some of these programs, employers will match the fund contributions of their workers. This can be a massive help to your finances during retired life. Perhaps your workplace hasn’t been so kind to you over the years. I still urge you to look into any plans they’re offering you. A surprising amount of middle-aged people completely overlook retirement plans. If it’s a matching program, not contributing is effectively turning down free money! If you’re self-employed, or you work at a small business, there may still be programs you can benefit from. Talk to your bank, or a citizen’s advice worker about your options. They’ll be able to run you through the different savings accounts open to you and which one would be best.
Finally, don’t put all of your eggs in one basket. Ask any financial advisor worth his salt, and they’ll tell you that a diverse portfolio is a safe portfolio. If you’ve invested a lot in one market, and that market suffers a major crash, your personal finances could begin collapsing around you. If you don’t have that much experience in investing, then I recommend splitting your portfolio into stocks and bonds. Stocks can pay off incredibly well, but there’s a lot of risk involved. Bonds have far less risk, but severely limited pay-outs. If you’re only just beginning to invest, then don’t make any big gambles, and minimise your risk wherever possible. It’s a good habit to spread your portfolio over markets that have no link to each other. Take medical equipment and telecoms, for example. Through smart investment, you’ll have a much more stable retirement.
There you have my best financial tips for retirement. Changing your life in such a big way can feel a little daunting. However, there’s absolutely no reason for shaky finances as you move out of work and into old age.
Category: Personal Finance