retirement plan

Before you retire

Article Written by : Be Better at Business

Financial advisors recommend that we pay off our mortgage, credit card debt and other large debt before retirement. Many gets less monthly income during retirement and 40 percent of your budget is for housing and therefore, this advice make sense. Here are few things you can do to get ready for debt-free retirement.

• Make an educated guess of your retirement budget. In addition to main expenses such as utilities and food, add your travel, healthcare, housing, insurance and other expenses. Allowances for Federal, state and local taxes should be included. Estimate your retirement income from sources such as Social Security, pensions, 401(k) and other source.
• Make sure to add your investment goals during your retirement to your budget. While you work, you may have taken more risk and invest aggressively. But in retirement you need more stable investment and it may produce lower interest rate. Also, consider your contributions to your grandkids education and other contributions.
• Review your health care needs. Medical expenses may be an added expense if you are planning to retire before age 65. Your medical conditions may warrant more money for medical expenses during retirement too.
• Make a plan. Armed with all these expected income and expense, you can make a plan for your retirement way in advance and plan accordingly.