Retirement planning is something that you should be thinking about at all stages of life. It doesn’t matter if you are 22 or 62, there are things that you should be doing to make your retirement as comfortable as possible. These five things should be on your to-do list when it comes to retirement planning.
1-Eliminate All Debts
When you retire, you will have a fixed or limited amount of income coming in. Don’t make things harder on yourself by having a lot of debt to pay off. Make sure that your credit cards, auto loans and mortgage are paid off before you stop working. If you can’t pay off the entire debt, make sure that your debt is at a reasonable level.
2-Consider The Tax Implications Of Assorted Savings Plans
In the United States, a 401k plan or IRA can be treated in different ways. The money contributed can either be taxed in the year of the contribution, or taxed when the money is actually taken out. In Australia, those who use a SMSF should work with their accountants to determine the best way to deal with income taxes related to using or borrowing funds from their accounts.
3-How Much Money Will You Need For Living Expenses?
Just because you are out of debt does not mean that you won’t spend another dollar for the rest of your life. Create a list of things that you will need to pay for after retirement. Items such as electric bills, eating out, going on trips and giving money to charity should be in that budget.
4-Are There Passive Income Options Available To You?
Think about ways to make money after you retire. Owning rental properties can be a great way to make passive income. The Internet offers all sorts of easy passive revenue possibilities that can help turn a hobby into a source of easy cash.
5-How Much Equity Is In Your Home?
Paying off your home early gives you a source of cash should you need it in retirement. Home equity loans can give you access to money in a pinch. Selling your house is an option as well for retirees.
Retirement should be a time of living life the way you want to live it. With good planning, you can be on your way to the good life in no time. No matter how old you are, the time is now to begin that planning process.
About Author: Madyson Grant enjoys spending time with her family, traveling to distant countries and blogging about how to do it on a fixed income. Find out more about borrowing with your SMSF.