A checklist for
financial fitness,
a key
to celebrate long term living
Money
can be a difficult issue at any age, but financial planning is
especially important for your retirement years. You will want to
have enough resources to enjoy your time, and to take care of any
healthcare problems or other emergencies that may arise. Of course,
financial planning does not end at retirement—you need to
re-evaluate your plan annually.
Fortunately, useful financial tools and other resources are
available on the Internet, in books, and at the public library. A
variety of professionals can also assist in financial planning. Here
are some issues you should consider as you plan for and enjoy
retirement.
Know
What You Need.
Saving for a long and productive life can be challenging, but you
can and should do it. The first step is to determine how much money
you will need each year to live comfortably. This will require a
careful examination of your income, resources, and expenses. It will
also require that you make decisions about the kind of lifestyle you
want throughout your retirement.
Know
What You Have.
Social Security, pensions, savings accounts, IRAs—it all counts.
When planning your financial future, include all sources of income.
Don't forget rental property and bank certificates of deposit. Even
your Savings Bonds count. Read all the statements you receive from
your pension fund, Social Security, 401(k), and IRAs. If you see a
mistake or inaccuracy on any statement, contact the plan
administrator and have it corrected immediately.
Re-Evaluate Your Financial Plan.
Don't
"set it and forget it." A lot can happen between now and your
retirement, as well as throughout your retirement years. Re-evaluate
your retirement savings plan each year to stay on track. You may
want to consult a professional financial or investment planner to
maximize your savings potential.
Increase Your Savings.
If
you can, contribute the maximum amount to all of your eligible
tax-deferred retirement savings,including your 401(k) plan and IRAs.
To take full advantage of these tax benefits, you may have to adjust
your spending habits or forego some unnecessary spending, such as
weekly dinners out. But everything you can save during employment
will pay off in the long run!FE
ARTICLE
Track
Your Expenses.
Write
down everything you spend for three months. Don't rely on memory
(which can be unreliable), but make entries every day in your
expenses journal. When you review your record, you might be
surprised how much you spend on things you really do not need. All
expenditures that you can cut from the "unnecessaries"can be added
to your retirement fund.
Pay
Off Those High-Interest Credit Cards.
Credit cards are incredibly convenient, but carrying debt from month
to month can cost you a lot of money in interest charges. Make it a
priority to pay off your credit card balances every month. When you
choose a credit card, look for one with a low interest rate. It can
make a big difference.
Organize Your Financial Documents.
Do
you know where your insurance policies are? How about your will?
Take the time to organize all your important financial documents.
Keep them in a safe place. Let your family members, your legal
representative, or a trusted friend know where they are located and
make sure they can be accessed.
Cover
Your Healthcare Costs.
Longer life expectancies mean greater chances of medical problems
during retirement. Be sure that healthcare is part of your
retirement plan. Take time to review your insurance policies, so you
know what is covered and what is not. You might want to purchase
insurance that would pay for long-term healthcare, such as home care
and care in a long-term care facility, in case you experience an
extended illness. The cost of long-term healthcare insurance will
depend on your age at the time of purchase, the amount of coverage
you get, and other policy features. Planning ahead can save you
substantial amounts in the future.
Become An Educated Investor.
Get
help from a financial professional or consider enrolling in a
financial education class to better understand how to manage your
money for all your retirement years. Books, magazines, Internet
sites, seminars, and classes are available for the financial
do-it-yourselfer. You may need to do a little research, and your
local public library is a great place to start. If you decide you
would rather have expert advice, a wide variety of professionals are
available to help you prepare for a financially secure future.
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