The average American spends half their life working a job, and breaking through into retirement is a difficult journey. You might be in your peak earning years and still not know what to do with your free time because you don’t want to spend it all at once, or you’re worried about the future.
In this blog post, we’ll share 12 great financial tips for seniors living at home or in Sacramento assisted living facilities that can help make that process easier.
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1.) Set Retirement Goals
If you’re a young person, your first few decades will probably be the most financially relevant years of your life. Along that timeline, retirement is a way to make sure you’re reaching important milestones like potentially retiring at 35 or 45, for example.
Setting goals for retirement can give you a good idea of what experiences you want to have and how much money you need to retire.
2.) Save Early and Save Often
When you’re making your retirement goals, plan early. By planning early, you can make sure that sufficient amounts of income are coming in so that you can live comfortably for the rest of your life.
It’s a good idea to create a monthly budget and make sure that you’re saving at least 10% of your income. That way, instead of trying to get by on less when you retire, you can live comfortably for the rest of your life.
3.) Create an Emergency Fund
There are certain aspects to retirement that you don’t anticipate. Things like medical emergencies and major car repairs can quickly wipe out an entire retirement savings plan if there’s not enough money in reserve to cover these expenses.
An emergency fund is a great way to get ahead of these major problems, and in a worst-case scenario, you could even live off of it for a few months. An emergency fund should be two to three months of your income, which is about $4,000 or more.
4.) Know Your Investments and How to Make Good Decisions
Don’t think you can just buy the stock market and escape from the world of financial planning. It’s very important to know how the stock market works. Even if you didn’t learn basic investing principles at school, there should be a financial advisor who could teach you everything you need to know.
Instead of relying on a financial adviser, you can use tools like the E*TRADE Total Equity Market Index Fund. The portfolio of this fund is entirely composed of stocks and mutual funds, which means that it will invest in a wide range of stocks at once.
5.) Understand How Insurance Works
If there’s an accident on your way to work or something unexpected happens to you and your income is significantly lower than usual, you’re going to rely on an insurance policy. If there’s something you can do to reduce the risk of these events, it’s probably a good idea to do so.
Using life insurance is a great way to offset future income for your family. If you store money away for your children or spouse in order to pay for their expenses after your death, this is also a common practice among retirees. It’s also necessary if you’ve got a significant financial penalty that you’ll have to pay after your death, such as estate taxes.
6.) Consider Downsizing
You may have a house that you do not need anymore or that you’re no longer living in. Downsizing your home can be an easy way to make your life easier, especially if there are a lot of things that you do not need.
If downsizing is too much of a financial strain, renting out the space you don’t use can work in the same way because it will be cheaper than paying for more space.
7.) Look at the Long Term
Retirees can learn to live on much less money than they’re used to. That being said, you should probably think about how your life will be in 20 years and make plans based on that information.
8.) Eliminate Your Debt
If you have any credit card debt, it’s a good idea to pay it off as soon as possible because it can have a huge effect on your financial situation. Even if you don’t have much money saved up, using this tool to balance your debt will make your finances much better than they were before.
9.) Review Your Investments
Even though you may think that your investments will be fine for the rest of your life, it’s a good idea to review them each year. This can ensure that you’re doing what you should do to keep your finances in order and on track.
If you have no more debt, have an emergency fund, and are saving at least 10% of your income each month, then there’s really nothing else for you to do. The only thing left is to look over your investments and make sure that they’re working in your best interest.
10.) Consider a Second Job
While it’s common for retirees to have a job that they enjoy, it’s also a good idea to work several jobs and choose the one you like the most. This is especially true if you have any extra time on your hands because it will let you be productive at something that you like.
Know that your life will be in transition for a few years after you retire, but this is normal and all part of the process.
11.) Plan For Long-Term Care
After retirement, you may find that you need some sort of health care or assistance with your everyday activities. Because of this, you may want to take out a long-term care plan such as health insurance. You can as well consider Sacramento assisted living facilities that can help you get set up, too.
12.) Make Sure You Have a Will, Trust, and Power of Attorney
Having a will ensures that your family is taken care of after your death, and it also prevents them from fighting over the property that you’ve set aside for them. If there’s an inheritance coming to your family, this is necessary to avoid any legal issues.
A trust is used to ensure that your assets are distributed as you intended and that there’s someone to manage the property for your beneficiaries. This is also particularly good for people with families because it will make sure everyone gets what’s coming to them.
A power of attorney is similar to a trust in some ways, but it does not have to be an estate planning tool and could be used by anyone. A power of attorney assigns someone else the duty of taking care of your finances if you are not able to do so yourself.
Retirees deserve to have the life that they want, and they deserve to be able to live their lives to the fullest. Even though it may take a while, it’s necessary to get started on your financial journey and start planning for retirement. These tips can help you make sure that you’ll be able to enjoy the best retirement possible and will ensure that you’ll be happy with how you live your life when you do retire.