Smart Tips When Preparing for Retirement

retirement (Photo credit: 401(K) 2013)

Between 45 and 54, the idea of retirement often becomes more important to many individuals. But in order to make sure that this goal is attainable, there are several smart tips you will want to follow.

Catching Up After Age 50

For those just beginning to seriously save towards retirement, Investopedia.com says, “Don’t be disheartened.” “Better late than never,” is definitely applicable in this case. And there are actually special provisions for individuals people aged 50 years and up to “catch-up” on their retirement goals.

For people age 50 and older, the limit of contributions to an IRA, 401(k), 403(b) or 457 plan is raised to an excess of the usual threshold. This allows salary deferral contributions to be higher which builds up a nest egg for the future more quickly.

Rebalancing a Portfolio

As you approach retirement, your asset allocation should be reassessed every once and awhile to ensure that your investments become less risky as you grow older. This is because as you move toward the end of your working career, you will have less and less time to recover from investment losses. So rebalancing your investments will help you find places to allocate funds that are more dependable as you near a time in which you will rely on them more.

Supporting Older Children

Another consideration to take into account is any children or other family who are still dependent on you. Although it sounds harsh, you may need to consider your own best interests if you are nearing retirement age and still supporting adult children who live at home. Think about beginning to charge them rent or a portion of their living costs. In most cases, you will actually be doing them a favor by encouraging their responsibility and maturity.

Preparing for the Unexpected

Another life factor which may become more real as you age is the possibility of long-term illness and more frequent medical costs. To protect yourself and your nest egg, it might be wise to look into long-term care (LTC) insurance. These sorts of plans will help cover medical expenses so that your finances remain stored for living and other costs.

Getting Free to Plan and Save

For many individuals, all of these plans sound like great ideas but are really quite impossible because of current debt and other difficult financial situations. In order to devote more attention to savings, you will first want to work your way to financial freedom.

Begin by focusing on paying off any demanding short term loans. TitleBucks.com and similar lending companies can be helpful in a serious bind. But to use them properly requires paying them off immediately and gradually weaning yourself off reliance on quick cash. Asses your lifestyle and find ways to make cuts so that you can live within your means. This is a great beginning step towards savings and investment later.

With these keys to achieving financial stability and preparing for the future, you can look forward to a successful retirement.