You can do too little when planning for retirement. Yet most of the advice is focused on one thing: accumulating as much money as possible.
While that’s not a bad idea, you also have to pay attention to spending and lifestyle. A few key moves can make a big difference:
1. Pay Down All of Your Debts.
Lowering your “debt service” will give you more cash flow for regular expenses and the fun things you want to do. What does this mean?
Concentrate on knocking down your non-deductible debt like installment, vehicle and credit card debt. You’ll be a lot better off in retirement if you can own your cars and appliances and pay off your credit card each month as it comes due. Should you pay off your mortgage? While that’s always desirable, it’s probably the last debt you should pay off since the interest is deductible.
2. Save to the Max in Your Retirement Plans.
Right now, you've got a steady income with a somewhat secure career. However, later on, that will not be case. Therefore, we recommend you pay attention to the future too. Don't go around spending all your money without considering the future-you.
Retirement matters NOW so make sure you save as much as you can when it comes to planning retirement.
3. Plan To Downsize.
There are so many benefits to getting a smaller domicile, but mainly you can reduce costs, such as maintenance and utility bills.
The bottom line is that you don’t need to pay for all of that space. Even better is that you can sell your house and downsize to a condo/townhouse/apartment or smaller home.
But when considering downsizing, carefully evaluate where you may be moving. Also pay close attention to cost-of-living, healthcare and other expenses when it comes to moving.
If you plan ahead, reduce spending/debt and streamline your financial life, it will be a lot smoother going when you decide to pull the trigger.
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