Procrastinating
Procrastination can wreak havoc on your long term goals. From your personal life to your career, preparation is the only way to get ahead. Enjoying a happy and comfortable retirement is no acceptation. Strategizing and having a clear understand of what you can do, from month to month, to prepare for retirement is the best way to stay on track. Don’t put it off for any further Get your retirement plan in order.
Not Revisiting Your Retirement Plan
Retirement planning is not a set it and forget it activity. Just as your income level will change throughout your career, so too should your retirement plan. Take the time, every 2-3 years, to sit down with your financial advisor and review your plan. Are you on track? If not, what can you do to close the gap in your retirement savings? Can you afford to contribute more than you could a few years ago? These are all great questions to consider. By taking just an hour or two every few years, you can rest assured that you’re on the road to a comfortable retirement.
Not Moving Away From Riskier Investments
Assuming you’ve accrued a significant amount of savings at this point, it can be time to move toward a slow and steady approach to retirement investments. Talk to your 401k administrator about the kinds of funds into which you’ve invested and discuss a strategy designed for the long term. Generally, it’s safer to invest in higher-risk, potentially higher payoff stocks in one’s 20s and 30s when there is less to lose. In your 40s, it's better to take a more conservative strategy.
Having Too Much Credit Card Debt
If you have large amounts of revolving credit, it’s time to stop pretending that eventually credit cards will be paid off, especially if “eventually” is still some undefined time in the distant future. The cost of interest on these debts is probably enormous, and it’s time to pay them off.
Consider significantly upping your monthly payment amounts, or consolidate the debts into a lower-interest home equity loan if you have significant equity in your home, and take the loan for only the amount you need to pay off the cards.
Don’t use a home equity line of credit (HELOC) if you don’t have good spending habits with credit and you think you will be tempted to keep charging more. However, if you’re planning any major home improvements, replacing appliances, or other larger expenses, a HELOC might be a good choice for you. If taking out a home equity loan maxes out your equity, then making larger payments on the cards might be a better plan.
If you do decide to use home equity to pay off the debt, develop a payment plan (not the minimum payments) to get the loan paid down long before retirement. Once the cards are paid off, it shouldn’t hurt your credit score to close a few of the accounts up. To keep an active credit history, you’ll want to keep using a few of them and paying them off right away. Any large purchases should be paid off within three months to avoid paying too much in interest.
Not Taking Into Account Health Care Needs
Accounting for health care costs today, and for years to come, is essential to your retirement plan. If you have not been accounting for medical expenses, now is the time to go back to the drawing board. Though Medicare covers lots of medical expenses, you will likely need supplement insurance. Long Term Care (LTC) coverage is another product to consider. Designed to help protect your assets in the event that you need long term care, LTC can even be purchased as part of a universal life policy.
So when you begin thinking about retirement and planning for the future, remember to keep these things in mind, so that you can relax and enjoy what should be your relaxation years.
For more information give us a call at 800-301-8113 or visit goldcoastlifeinsurance.com
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