Giving your retirement plan a checkup when your kids move out of the house can help you stay on course for a comfortable future.
The kids are finally out of the house and you're established in your career. What a great time to be you! Now you can keep more of your income and really think about your retirement. As retirement shifts toward being a short term goal, you will need to do a serious evaluation of your finances and make some adjustments so you can live as comfortably as possible. Here are some tips that you can use as an empty nester to assess and adjust your retirement plan so that you can have a comfortable future.
Adjust to Being Empty Nesters
Children are expensive, but there is light at the end of the tunnel! Once your kids finish college and/or move out of the house, you can save money on gas, food, recreation and, if you decide to move, even housing. You may find you have enough leftover money to take a vacation or buy a second home. But more importantly, you can put extra cash in your retirement accounts so your money can grow and you can enjoy it when you stop working. The bottom line is that as an empty nester, you can probably make more considerable changes to your finances than any other life stage. Take this opportunity to evaluate your retirement plan and make adjustments now that you aren't spending as much money on your children.
Have a Professional Assess Your Progress
The closer you draw to retirement, the more thorough your retirement checkup needs to be. Unless you are particularly financially savvy, your personal evaluation may not suffice. Instead, you may want a financial planner to take a look at your savings and investments and assess your progress. He or she may find that you are right on track and can retire when you planned. Or your financial planner may find that you need to make some adjustments to your strategy to meet your retirement goals. Regardless, seeking professional advice and making adjustments accordingly can help ensure a comfortable retirement.
Examine Your Debt
Do you have a balance on your credit card? Are you still paying a mortgage or car loans? Managing your debt is a critical part of evaluating your retirement plan and making adjustments, especially as retirement gets closer. While you are still working, it is fine to squeeze loan payments into your monthly budget. But once you stop working and begin living on a fixed income, you might find that those payments make things uncomfortably tight. Make a commitment to yourself to pay off your debt before you retire so you can truly enjoy your retirement when the time comes.
As an older adult, you have probably reached the milestone of retirement. To make your retirement dollars stretch as far as possible, it is particularly important that you sacrifice wants for needs. Good money management can help you live within your means.
Retirement plans have been front page news in the past few years, mostly in negative ways. Polaroid retirees watched their pensions disappear. Enron employees were prodded to put their retirement money into Enron stock, and you know what happened to that. Then there are General Motors's current problems.