When you are working full time, retirement can seem like a far off mirage. However, it can sneak up on you and if you’re not ready, it will be a rough ride. Some people live paycheck to paycheck and that’s not the right way to prepare for retirement. You need to start preparing for retirement by the time you are in your 50s and here are a few tips that everyone can use.
In the real estate business, the 3 most important things to consider are location, location, and location. Location is very important for retirement as well. When you are near retirement, you will need to decide if you want to stay or move once you retire. Being retired means you are no longer tied to a location. Moving to a more affordable location is a great way to reduce your monthly expense in retirement. Even if you don’t want to move away from your town, you should consider moving to a smaller home. Moving can save you a lot of money in the long run. Do your research now and see if relocation is a good strategy for you.
Pay off debts
Make paying off debts a priority before you retire. Once you retire, you won’t have as much income and you don’t want to send a portion of it to your debtor. Pay off debt while you are working and you won’t have to worry about it later.
Reduce investment fee
Many employees participate in their company’s 401(k) plan. This is a good investment strategy and it will help you in retirement. However, many investments in a typical 401(k) plan have high fees which will cut into your ROI (return on investment). When picking an investment, pay attention to the fee and keep it as low as possible. Once you retire, think about rolling over your 401(k) to an IRA so you can have more investment choices. Low fee Vanguard funds outperform 80% of high fee mutual funds in the long run so give them a look.
Maximize interest and minimize fees
Check your bank account and see if it’s the best bank account for your circumstance. An online bank account will usually have higher interest so you should compare the rates. Make sure you are not paying too many fees on your bank accounts as well. A free checking account is more difficult to come by these days, but it is still available.
Retirement can be a sudden transition for many employees. One way to lessen the impact is to start doing freelance work while you are still working full time. That way you can transition from working full time to part time freelancing. Freelancing will give you something to do in retirement and the extra income will be helpful too.
There you have it. These are just a few tips to help with your retirement transition. Retirement will be different for everyone and it’s best to spend some time preparing for it. Don’t let retirement sneak up on you.
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