Tips for Preparing To Retire

Preparing To Retire

If you’ve never thought about retirement, you should. Time passes away in the blink of an eye, and you’ll be approaching sixty-five before you know it. Preparing for retirement should be on the minds of every working individual. The sooner you start preparing for it, the more comfortable those golden years will be. Here are some tips for preparing for retirement.

Consolidate Your Debt

If you have several outstanding loans along with credit card debt, you’re likely paying unnecessary interest. Apply for loan consolidation through a lender such as MaxLend. Take the money from that loan and pay off all your other debts. Then you’ll have one payment instead of several and will be paying less interest.

Take a good, hard look at your budget and see what you can cut back. Do you really need that cable service? How about that latte you order every morning? By cutting back on these expenses, you can use that money for paying off your debt. Once you’re debt-free, you can start saving to invest for retirement.

Buy a House

If you’re renting the place where you live, you are not only wasting money, but you’re paying someone else’s mortgage for them. Pay off your own mortgage instead. Make it your goal to set aside ten percent of your net pay each month and put that into a savings account. When you have enough to cover the down payment and closing costs, buy your own home.

Make sure you get a fixed-rate mortgage. It will provide you with a hedge against inflation. Your home will increase in value the longer you live in it, too. Make extra payments during the first three years and you could shave years of payments off your loan. When the mortgage is paid, you’ll have a rent-free place to live for the rest of your life.

Set Aside Money Each Month

Get into the habit of saving money each month, even after you’ve bought your home. Come up with a budget you can live with and do your best to live within that budget each month. Don’t think of a budget as deprivation, but rather a spending plan. Think about the long term and where you want to be in ten years. Then plan and set smaller goals you can achieve until you reach your longtime goal.

Also, have money taken out each month and deposit it into an Individual Retirement Account. If you work for a company that offers it, take out a Roth IRA to protect the interest from being taxed. There is also an individual IRA and even an IRA for those who are self-employed.

Start Investing

Once you have money saved and are contributing regularly to an IRA, start looking into other ways to invest your money. You could buy a rental house. Your tenant will pay the mortgage for you, and you’ll get a little extra income besides. Save that income and buy a second house and then a third. Your rental homes will provide you with a comfortable retirement when you’re ready to quit working.

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About the Author: Mike