Are you ready for retirement? If you’re 50 years or older, then it’s time to get your long term finances in shape. These are the best financial tips for anyone who is starting to seriously plan for retirement in 2018.
Renew Your Certificate of Deposit
If you have a Certificate of Deposit (also known as a time deposit or term deposit), then it’s a good idea to reinvest your savings if you are approaching end of term. Interest rates are rising and they are expected to continue to rise throughout 2018 and 2019. Better interest rates will mean increased returns on any cash savings that you have. Keep your Certificate of Deposit accounts for as long as possible so that you can benefit from the stronger economy and increasing interest rates.
Diversify Your Investments and Save More
It’s important to diversify investments at any stage in life, but even more so as you approach retirement. If you have all of your investment in one area, such as savings or the stock market, then you will limit your potential gains and open yourself up to a considerable amount of risk. In addition to the stock market you can buy bonds, invest in startup companies as a private investor, save in high return time deposit accounts, or even get into the property market.
Saving as much as 15% of your income is recommended, and this should be started long before you reach the age of retirement. Even if you’re paying into and employer retirement plan or an IRA, you should still be setting aside personal savings that will boost your retirement cash reserves.
Plan Your Estate
Name any beneficiaries of your assets and accounts long before you reach the age of retirement. Not planning your estate can lead to conflict and a high amount of stress once you are gone, and this is not something that you will want to put your family through. When your beneficiaries are clearly named in a legal will, you will remove any misinterpretation or conflict regarding your assets.
Clear Debts as Early as Possible
It’s much easier to save and have a clear idea of your finances when you have eliminated debt. Pay off outstanding student loan debt, credit card debt, your mortgage, and any other loans that you might have. Even if paying debt will reduce your savings contributions, it will work out better in the long term by making you more credit worthy. Clearing debt will also reduce your expenses in retirement.
Don’t Overlook Fees on Retirement Accounts
Any area of retirement funding or general investment will be associated with fees. These fees can quickly erode your earnings, so make sure that you are aware of the fee structure before joining any new savings or investment program. It is also important to review existing fees for older investments, as these can change over the years, and you may not be getting the deal today that you originally signed on for.
When you plan for retirement early, you will eliminate surprises and ensure that unnecessary stress and financial burden is reduced.
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