You’ve been working, planning, and stashing your cash and now retirement is in view. It’s a beautiful sight. However, you aren’t 100% sure you’re prepared. For one thing, you’re wondering how to get rid of credit card debt before you take the leap. If retirement is just a decade or so away, here are some smart money moves you can make to ensure your finances will serve you well.
Make a Retirement Budget
There’s no way around it: you must take time to determine how much you’re likely to spend during your Golden Years. Doing so will give you peace of mind. And if you’re married or have a life partner, be sure you’re on the same page so you’re both saving an appropriate amount.
Create a realistic budget and keep an eye on your spending now. There are various tools you can use, including an Old School spreadsheet or a budgeting app. If spending is a problem, the time to rein it in is now. Yo’ll need your money to last during retirement.
Look in on Your Retirement Accounts
Perhaps the retirement funds you established decades ago have largely been on auto pilot, what with those automatic contributions. Well, it’s time to check in on these accounts.
Maximize contributions to your 401(k) or self-employed retirement account, now that retirement is in sight. If your employer matches 401(k) contributions, make sure your contributions are sufficient o ensure the company maxes out its contributions.
People over 50 may benefit from “catch up” contributions, which permit extra IRA or Roth IRA contributions of $1,000, and 401(k) contributions of $6,500.
Develop Multiple Income Sources
For more peace of mind, it’s a good idea to establish multiple income streams to help offset the loss of a paycheck and supplement your primary nest egg. Perhaps such income will derive from a pension, investment accounts, a side gig, or income producing assets.
Make Sure You’re Investing Wisely
Now’s also the time to mitigate investment risks and concentrate on portfolio diversification. You don’t want all your investment capital in the same proverbial basket. For instance, it’s a good idea to add assets to your holdings that are not directly tied to a volatile stock market.
Focus on Erasing Debt
You don’t want a day of your retirement to be spent worrying about paying off debt. You want all your money to go toward retirement. With 10 years before your working days are in your past, now’s the time to assess your debt load and come up with a strategy for erasing it.
Perhaps consolidation would work. That’s where you roll your credit card and other unsecured debt into a single monthly payment, ideally at a better rate. You can take out a consolidation loan or apply for a 0%-interest balance transfer card, onto which you can shift your higher-interest credit card balances.
If your debt situation is more acute, you may want to consider debt settlement, also known as debt relief. With this strategy, you hire a company to negotiate with your creditors to allow you to “settle” your debt with a lump sum payment of less than what you owe. You have a good chance for success since your creditors realize that if you file bankruptcy, they may get nothing.
If you make these smart money moves before retiring, you’re setting yourself up for a “golden” post-work life.