Manage Debt
As you approach retirement, it is crucial to reduce your debt as much as possible. Start by creating a budget that allows you to pay off your debts systematically. Prioritizing high-interest debts, such as credit card balances and personal loans, can help you save a lot of money on interest payments in the long run. You can also consider consolidating your debts into one payment with a lower interest rate to make it easier to manage.
Turbocharge Your Retirement Savings
Many financial professionals recommend having roughly three times your annual salary saved in a retirement account by 40 and six times your salary by age 50.
With the extinction of most pension plans and longer life expectancy, it’s critical to save for your future through a workplace retirement account 401(k) if you have access to one.
For 2023, the 401(k) limit for employee salary deferrals is $22,500, workers aged 50 and older can add up to $7,500 more annually as a catch-up contribution in 2023 — up from $6,500 in 2022. Keep in mind that employer matches don’t count toward this limit. IRA savers 50 and older can invest $7,500 in 2023, representing $1,000 in additional catch-up contributions.
Talk to Your Family About Money
Navigating conversations about money with your loved ones can be awkward and uncomfortable, but it can benefit all parties. It is important to discuss estate planning with your children and parents, regarding wills, healthcare proxy, living trust and who will have the power of attorney. Being more open and transparent about finances and healthcare, leads to a healthier relationship with money.
Develop a Financial Strategy to Achieve Your Goals
Studies have shown that planning supports good money habits. Those that have a written financial plan said they feel financially stable and that they will be able to reach their goals. Planning, even in small steps, doesn’t take large sums of money to start. It can have a profound impact on lower-income households too by helping people improve their saving and budgeting habits.
Financial planning is more than just investing and accumulating assets, it is about taking a holistic view beyond products and portfolios to create a personalized approach, which is both offensive and defensive, taking into consideration life insurance, annuities, long-term care and disability insurance to mention a few strategies that will prevent a catastrophic event from derailing your plans.
This material was produced for Damefender Financial Partners use. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.