What Should You Do 5 Years Before Retirement?

The five years preceding retirement are a critical time to reinforce the nest egg you have been building up and finish paying off debts. By taking care of the remaining loose ends, you can enjoy your retirement years to their fullest. When it comes to your retirement, the last five years preceding it can be a make-it or break-it period for some people, especially those who began saving later in the game. Here’s a checklist to make sure you hit the nail on the head with your retirement plans.

Are You on Track — Or off?

First, assess whether you are on track with your retirement goals or off. After a thorough analysis of your finances, you are ready to consider the following tips to keep your retirement smooth and stress-free:

● Keep A Strict Check on Your Budget:

Don’t wait for retirement to try on its lifestyle and see if your budget fits your needs. Start trying to live on your expected retirement budget a few years before you actually retire so you can ease into the lifestyle better. By getting used to a lower budget, you can identify aspects of it that are too limiting or too relaxed, make necessary changes, and ensure it suits your preferences by the time you hit your actual retirement age.

● Keep Adding to Your Savings:

Put as much money into your savings and retirement account in the last five years preceding your retirement as you can. As best you can, try to max out these accounts within this timeframe so you have more than enough financial leeway when retirement hits. Ensure you set aside enough income to account for healthcare costs that might see a hike when you reach retirement age.

● Consult an Experienced Financial Planner:

If you aren’t sure how to work with the distributions from your retirement plans, hiring a financial advisor can help you. They will walk you through all of your alternatives and give you an idea of how to adjust your investments to keep aligned with your goals during these crucial five years. Ensure you are clear about your financial goals, the kind of lifestyle you plan on leading during retirement, and all your investments, with your financial advisor.

● Pay off All Your Debt:

Now is the time to go debt-free. In fact, anyone approaching retirement should aim to be debt-free, or as debt-free as they can be. This will help you make the most of your budget as you live on a limited income in your retirement years. Aim to make the additional mortgage, loan, and EMI payments to pay off all your outstanding dues. With business-related obligations, try to limit further debt from your entrepreneurial activities and focus on repayment in these last five years.

● Have A House of Your Own:

Owning a house for yourself is the preferred way to keep housing costs low as you enter retirement. In case you plan on staying in your current home once you retire, the key is to evaluate any major or minor repairs that might be needed within the next twenty or thirty years. Perhaps your roof needs repairing, or you need upgrades for certain appliances. By making these changes when you have a good flow of income pre-retirement, you won’t have to dip into retirement savings to pay for these costs later.

● Do your retirement math:

Account for all major and minor expenses that might come your way once you retire. From having to buy a new vehicle, or preparing your current vehicle, to healthcare emergencies: the more thorough you are about potential expenses, the better you can account for whether your retirement fund would be sufficient to cover these. Accordingly, you can add more funds to it now, while your income is steady than wait to retire only to find out the hard way.

Conclusion

Your retirement is an ode to the years of hard work, learning, and life-building that you have done. It's time to sit back, relax, and even bask in your glory without having to stress another day about income or bills. One of the preferred things you can do to secure your financial future, including retirement funds, is to consider getting a comprehensive life insurance plan. This can keep your loved ones safe in your absence and offer survival benefits to you after the policy matures. Get your retirement plans right with a sound investment portfolio that includes an insurance plan to protect yourself and your loved ones financially.

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