Finally, you are over the hump. You have passed trials and tribulations and now starting your “senior” years. Those supposed golden years of sunshine and retirement aren’t quite here yet, and you have questions. The main question most likely on your mind is…will you have enough money to retire? How large will that nest egg have to be to make sure that you won’t be destitute and reliant on your kids at age seventy five? What are the right financial moves?
Hopefully you have already taken the right steps, such as investing in a Roth IRA and a 401k, as these would help make things easier. If you haven’t look into those immediately. The first step is doing research about what you pay for and what your assets are. These two things are incredibly important. For example if you are paying off debt, whether it be credit card debt, student loans, etc. Pay off any interest that has accrued quickly and research whether or not the company would be willing to change pre-existing interest rates for acclerated pay back.
After research comes the next inevitable step, planning. Planning can not be understated when talking about finances. Its is the crucial action which will help from bankruptcy or other emergencies. Now the extent of planning will depend on how much money you’ll want available and what kind of lifestyle you will live. How long will you want to work? Social security may not be a solvent institution by the time this next generation wants to retire.
After analyzing the costs present, the next step is trying to minimize them. This could manifest in a number of ways. You could downsize to a smaller house, sell off a car, etc. So long as the ratio of costs to savings swings in the right fashion and an emergency fund is created, generally speaking, one is on the right path. The emergency fund should be proportionate to the amount of wealth accumulated. In the end, being able to save and live within a certain means and not outstripping savings is the most important thing.
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