5 Ways to Prepare Financially for Retirement

Everyone dreams of the day they’ll get retired, but romantic projection we have of retirement is often completely different from the harsh reality that often involves financial difficulties, loneliness and decrease in overall health.

The pension is usually much lower than our pay, which often makes new pensioners rethink about their spending habits and lifestyle. 

Still, retirement doesn’t have to be burdened by financial difficulties if the right financial strategy is applied even before the golden age takes place.

1. Don’t Rely Only on Savings

The fact is that nowadays people live longer than they did 50 years ago and often savings aren’t enough to live the lifestyle we are used to. 

So, before retiring make a financial plan that will make you money, even when the paycheck is gone. It can be investing in binary options, stocks, forex markets, or unsheltered savings.

It is always good to ask your accountant what are the possibilities or rely on a financial advisor who will make you a proper investing plan for the retirement.

2. Know Your Expenses

It is important to understand where all that money you make is going and to adjust your expenses to your possibilities while taking your future into consideration. 

Some researchers say that most people need 70-90% of their previous income to keep up with the lifestyle they had before the retirement, so it is important to rethink your priorities and needs before the first pension comes. 

Always have a real picture of your cost/income ratio.

3. Think Smaller

In our 30’s and 40’s we like to dream big, and we need big things, but once the children are on their own, all big things become a burden as they cost a significant amount of money. 

Try to cut costs before retirement by downsizing your home and getting rid of all unnecessary services. 

Find a cheaper mobile plan, get rid of expensive TV programs or TV on demand, and don’t be afraid to ask for a better deal or take your business elsewhere.

4. Reduce Your Debt

It is much easier to reduce your debt while still working than in retirement. People who efficiently handle their debts can enjoy their retirement care free. 

Besides getting rid of a credit card, student loans, and other types of debt, it is always good to check interest rates and fees charged by your bank. 

They may seem small, but they accumulate over time and can truly make a difference.

5. Review Your Will

Many things change over time and having an updated will gives you insurance that your estate will be distributed as you intended it. 

Periodical reviews of your will, will provide you the much more peaceful state of mind and will help your family in case of emergency. 

Also, sometimes thinking about future in that specific way, puts all things, including finances in a whole new way.