Your fifties are the best time to re-evaluate your financial position in preparation for retirement. You might need to check and double-check your financial records and straighten areas that require improvement.You still have sometime and earning power left to create wealth and explore investment opportunities before you retire.You should be finishing up with your retirement plans and plugging any unnecessary fund drainage because the ability to fulfil obligations is markedly different pre and post retirement. Therefore, avoidable or reducible expenses can be avoided or reduced via shrewd financial moves and only necessary expenses be planned for.
Downsize on housing: Housing is arguably the biggest expense in a retiree’s budget. The ability to comfortably cover insurance, repairs, maintenance, and especially property tax, which is the highest in the developed world, are greatly reduced when you downsize- especially since you wouldn’t need all that space anymore and repair costs will keep rising. Save on incurring more expensive tax, insurance and maintenance costs.
Annuities are a pretty good idea: Having another regular income stream to complement welfare benefits and pension plans make a more comfortable retirement. The single biggest advantage of annuities is that they allow you to stow away larger amount of taxes and defer tax payments. Also, you do not have annual contribution restrictions unlike other tax-deferred retirement accounts like ISAS. It would be advisable to contact your banker for more information.
Avail yourself of as much tax breaks as you can: By the time workers reach their fifties, they are usually at the peak of their careers and very likely to belong to the highest tax bracket. Therefore, minimize your tax obligations by identifying and taking advantage of areas that you qualify for tax breaks, for example, your retirement savings.
Make your Funeral one less expense to worry about: Life is too short to worry about things you can take care of. Invest in excellent pre-paid funeral plans and have one less expense to worry about as you prepare for a glorious retirement.
Save! Save! Save!:According to an article published on investopedia, the estimated average savings of a person in their fifties should be at least four to five times their salary. If you haven’t reached this goal, you might need to draw up plans to increase savings and reach your retirement goals.
Make sure you are debt free by retirement: Being in debt can ruin your retirement plans as this means that part of your reduced earnings will be used in settling obligations, rather than on things you would like to do after retirement. Whether mortgage, periodic repayment of a personal loan, or accrued expenses, debt need to be set off before you retire. There are debt relief options like debt management that can help you to pay off outstanding debt balance in five years or less.
If you feel that you are running out of time to arrange your personal finances in preparation for retirement, you might need to take aggressive decisions to ensure that your retirement goals are met.