Guest post by Bessie Hassan | Money Expert at finder.com.au
As you head towards retirement, there’s plenty to look forward to. Less time working a mundane job, more time with the grandkids, and a whole lot of spare time to finally take up that bridge or golf hobby you’ve been dreaming about. And of course travel, more time to tick off those bucket list destinations.
But becoming a retiree also means you need to prepare (and protect) your finances and assets for the future. Without a steady income, you need to plan carefully to ensure you have enough savings to live on comfortably, so you don’t encounter financial stress during your twilight years. By taking action now, you can avoid the headache later on.
So here are 4 tactics to help you prepare for retirement.
1) Go on a debt diet
The last thing you want to do is retire with a huge amount of outstanding debt against your name. Whether it’s credit card debt, mortgage debt, or another type of personal debt, you’ll find it very difficult to repay the debt once you no longer receiving a salary.
Going on a debt diet may involve resisting the urge to increase your credit card limit, refraining from taking out a car loan, or consolidating existing debt that you have by merging debt onto one account with a lower interest rate or fewer fees.
Taking steps to reduce your debt will put you in good stead for your retirement.
2) Set a savings target (and make it a priority)
Take a look at your budget with details of your income, assets, expenses and debts, and see what’s leftover each month. Once you can see how much you’re putting away each month, you want to try and increase this number.
Think of ways you can boost your savings in certain areas of your life. For example, you may decide to cut back on entertainment or travel costs by ditching your tennis club membership and taking the bus more often (instead of driving).
Once you’ve done this, it’s time to set yourself a savings goal. You can do this manually or you can use an online calculator. Work backwards by deciding the amount you want to retire with, and then enter your savings balance and interest rate, your current age and retirement age. You can then estimate how much you need to save each year, and month to realise your savings target.
Make every conscious effort you can to stick to your savings plan, even if it means missing a few social events or shopping at a budget supermarket.
3) Find ways to boost your super
Knowing how to boost your super is central to retirement planning and ensuring that you have enough funds to retire comfortably. Combining your accounts is one way to save money because you’ll only have to pay a single management fee, and if you’re self-employed, you can enjoy tax-deductible contributions which can make a big difference to your taxable income.
Doing some research and finding out how you can squeeze the most from your super is central to unlocking your financial freedom.
4) Insure your assets
Insuring your assets is a smart way to protect your finances for the future. This could mean taking out landlord insurance for your investment property or even just updating your home and contents insurance policy.
For more expert tips, speak with our friendly and professional debt consultants today. We’re here to help! We’ll help design and build you a brighter financial future with our proven debt management solutions. Fill in the contact form below or call us now on 1300 368 322.