After years of hard work, saving, and planning, your retirement is finally right around the corner. It’s likely that you have a retirement plan in place already, and the last thing you’d want is for something to happen that can potentially derail that plan. If you plan to retire in the not-so-distant future, the following tips can help keep your retirement plan on track:
Avoid tapping into your home’s equity
If you own a home and need to tap into your equity in order to take care of debt, bills, or retirement expenses, you may want to postpone retirement or explore your options. This can be risky, especially when you’re no longer working. If you take out a home equity loan before you even reach retirement, your plans may change completely. Tapping into your home’s equity should be a last resort and only if a true emergency arises, and you have no other options. Remember that if you fall behind on payments, you can possibly lose your home to foreclosure.
Explore your refinancing options
Refinancing your mortgage is a big decision, and doing so before retirement could change your plans. If you have a high interest rate, and you’re hoping for a better rate so that you can live on your new retirement budget more comfortably, explore your different options. Although refinancing is designed to save consumers money in the end, you could also create an additional financial hardship on yourself. Many people will start a new 30-year home loan when they refinance, but as a soon-to-be retiree, entering into such a long-term loan can be a burden. While you’re still working, consider a 10-year or 15-year mortgage if you want to refinance. The monthly payments will be a little higher, but they’ll be easier to handle while you have a steady income, and you’ll pay off your mortgage faster. Calculate the timing with your retirement—the ultimate goal is not to have mortgage payments in your retirement, or to have as few remaining as possible.
Budget for things that you don’t pay for now
Your retirement plan will likely include a list of your expenses, bills, and the money that you’ll receive. However, it can be difficult to think of the things that you may need once you retire that you don’t need now. For example, once you reach retirement age, you may have a lot more medical expenses to deal with than you do now. You may also need to pay for certain home modifications that can allow you to be comfortable as you age, or you may have other long-term needs. Plan for the unexpected ahead of time, so that you aren’t caught off-guard once you finally reach your retirement age. It can be disheartening to discover right before you retire, that you no longer can afford to because of new expenses.
Never stop saving
If you’ve already reached your retirement savings goal, that’s terrific! But reaching your goal doesn’t mean you need to stop saving, either. Having more than you think you’ll ever need for retirement can help keep your plans on track. You never know what can happen right before retirement, and a sudden emergency can eat into your savings more than you could’ve ever imagined. Be prepared as much as possible by saving as much as you can.
Are you receiving structured settlement or annuity payments? Do you need extra cash to take care of bills and expenses, and find that your long-term payments aren’t enough? Peachtree Financial Solutions can help! By purchasing some or all of your future payments, we can send you your money sooner. Contact us today for more information and to receive your free quote.
Nothing above is meant to provide financial, legal, or tax advice. You should meet with appropriate professionals for such services.