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Every New Year brings a level of optimism but sometimes it dissipates fairly quickly. When it comes to financial planning there is never a bad time to sit down and check whether your affairs are in good order. There are many different reports of debt which is seemingly unmanageable. With the recession gone and growth, albeit slow, most with regular income should be able to make plans for the future as long as they resolve to spend wisely and cut out waste.
Think about retirement
It is easy to dismiss retirement if you have just graduated; it is so far in the future yet if you look a little closer you will see that it is never too early to start to provide for it. Perhaps you should try to imagine how you would like to spend your retirement and work out how much that lifestyle will cost you. Sure it might be difficult but current trends suggest that life expectancy is increasing and retired people are more active than they used to be. It all costs money.
While thinking about health, even though people are living longer there are also some worrying figures on obesity and poor diet. The consumption of processed foods with too much salt and sugar, fizzy drinks and friend food is a worry. Heart disease and diabetes are two immediate dangers for people whose diet is so poor. Fresh fruit and vegetables, fish and white meat are readily available, easy to prepare and likely to leave you far more healthy.
The potential health bills that you may face in later life if you do not look after yourself do not bear thinking about. Fidelity Investments recently estimated than a couple on the point of retirement can expect to face almost $0.25 m of bills in the future without including any long-term care.
It seems that the younger generation are increasingly accepting the need to save for retirement. The immediate thing to do is to get a 401(k) where your contribution is taken before tax. In addition your employer may well match your contributions up to an agreed level. Those over 50 can actually put in $24,000 annually which will stop the IRS taking $4,800 in tax. It has to make sense though there are two obvious questions:
• Can you afford to put that amount into your fund?
• Can you afford not to if you want a comfortable retirement? You may still be too late.
If you are carrying credit card balances you are wasting money that you could otherwise by saving. Credit card companies charge a high rate of interest. If you take out a personal consolidation loan repayable by instalment from nation21cashloans.com website you will save money. If you have regular income you should qualify. Act but remember you have no scope to build up balances again so only use your cards if you know you can pay your monthly statements off in full; and do it!
Those people who build up equity in real estate and reach retirement with no mortgage outstanding may choose to sell up and use the equity for helping to fund retirement. Every case is different and the calculation will involve the rental costs if you sell up completely and don’t buy anything smaller. Certainly you should not retain a large family home if it stretches your retirement income.
Investments and Assets
If you have money invested it is important to know how it is performing for you. The closer you are to retirement the less you should take any risks on the promises of better returns. There is nothing wrong with getting professional advice though make sure it is not going to involve you in excessive fees.
You should do a regular review of your finances and take action if you see any real causes for concern. You can cut out waste by getting rid of credit card debt but also by checking whether you are paying too much each month for such things as utilities, insurance and telephone. If there is scope for saving each month to add to the other assets you are building up you will be in far better shape for retirement than you would be otherwise.