Invest in Gold
If you’re planning to retire at the end of this decade, you only have about 60 months left to squirrel money away and plan how you will enjoy your golden years. As lovely as it sounds, entering the final lap before retirement can also be intimidating. At this point, it’s all about planning and follow-through.
So for those this close to retirement, here’s an overview of what you’ll want to accomplish before leaving the workforce.
Take a critical look at the current condition of your finances, including:
Investments: Check how your investments are doing and determine whether you need to reallocate funds. For example, you may want to fine-tune your risk exposure, sell out of underperforming holdings, or move into dividend-paying stocks.
Debt: Pay off high-interest debt, such as credit cards and personal loans. This will not only reduce your monthly expenses but also increase your chances of getting to do what you want in retirement.
It may seem silly to plan for a future when you don’t know exactly how much to budget, but do your best to estimate. Based on those estimates, build a post-retirement budget that you believe you can live with. It may help if you:
Do a lifestyle assessment: Consider the lifestyle you want in retirement. If you plan to spend time with family, visit friends, and enjoy plenty of fishing, your expenses will likely be lower than if you dream of traveling the world. The lifestyle you wish to lead will help inform your budgeting decisions.
Identify necessities: Decide in advance which expenses are flexible. For example, healthcare costs may be fixed, but how much you spend dining out or buying gifts is flexible. Determining what you can live without could make cuts a little easier if you have a particularly expensive month, or weak market conditions mean you don’t want to take money from your retirement account while the value of your assets is down.
Now is the ideal time to max out your contributions to retirement accounts. Once these five years have passed, you may not have another opportunity.
Let’s say you’re already maxing out a 401(k) at work. If you haven’t already, add an IRA to the mix. And if you have access to a health savings account (HSA), take full advantage of it. Unlike a flexible spending account (FSA), the funds in an HSA roll over yearly, allowing you to take what’s left into retirement.
