Some of the debts you need to eliminate before retirement are the house mortgage and car payment. These two are the biggest burdens that will greatly affect your retirement money if you fail to pay these off before you retire.
Also, cut down the things that you can do with less. For example, instead of buying coffee at your favourite coffee shop or buying lunch every day, why not start packing your lunch and lessening your coffee consumption.
In order to assess where you are at with your retirement savings, review your investments. Do you want to keep the investments you have now or do you want to explore other possibilities which will be a perfect fit for your new lifestyle? You need to review whether these investments are giving you the profit/income you are expecting from them, or there is a need to change your strategy and look for other options.
Reviewing your assets and investments also include reviewing your super fund. You can take advantage of tax concessions through your super fund, another step to let you save more.
After eliminating the unnecessary costs and reviewing your assets, it’s time to decide how much you are putting towards your retirement plan. The amount of money you will save now will determine the kind of retirement you will have in the future. In preparing for the budget, you have to take into consideration the activities you are going to do when you retire. Which activities will require money and how much are you going to save up for these activities? Will you be travelling? Therefore, if you plan to have a budget of $10,000 a month, you will have to put more compared to a $5,000 a month plan.
Investing was mentioned earlier because it is one of the major income boosters for you if you are keen on retiring early. However, be careful where you are putting your eggs in. Between stocks and bonds, stocks are quite often your safest bet because it is surer and steadier than bonds. Its return is also designed for the long term.
Getting yourself and your assets insured is another way of protecting your retirement finances. Remember that as you grow older, the possibility of medical or health problems surfacing is big. Therefore, you have to consider an insurance policy that will cover your income, investments, and your final expenses.