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Five Important Life Decisions to Think About Before Retirement

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Date : October 21,2013
By : Brooke Chaplan

As the baby boomer generations moves towards retirement, more individuals are finding that continued work is a necessity. However, as we age and develop a variety of chronic problems, working may not be an option. As you move closer to retirement, you must make a variety of financial decisions to ensure a better quality of life during your golden years.

Reduce Debt

Many baby boomers got caught up in patterns of excess consumption during the free-for-all spending boom leading up to the economic crises of 2008, and are now saddled with excess debt and have retirement plans insufficient to cover life’s basics plus the additional credit card and loan payments. Debt reduction should be accomplished prior to retirement. Take the time to work out a plan to sell off assets, and pay down loans in order to have sufficient income flow for daily life on a limited income.

Get Professional Financial Advice

You wouldn’t represent yourself in court or treat yourself with prescription drug medication without expert advice, so why not consult a financial expert about your plan for retirement? The earlier that you start, the better off you will be. Take time to find out how much you can expect from social security payments and rearrange your assets in your 401K, or other retirement plan to optimize your distributions throughout your retirement. In special cases talking to social security disability lawyers can offer some insight into a scenario when you can’t get to your retirement funds.

Income Distribution During Retirement

Most retirement plans focus on successful accumulation of wealth and interest payments on existing capital. Create a worst case scenario for income distribution as well as a best case one. Make sure that your plan will allow you to withdraw enough income no matter what economic conditions are over time. Make allowances for inflation and plan to get a sufficient regular paycheck from your retirement fund every month.

Five Important Life Decisions to Think About Before Retirement

Retire When Your Portfolio Says You Can

Forget about age. You need to set a monetary goal for your retirement portfolio to ensure sufficient income for your remaining post-work era. Once you hit that dollar amount, start planning your retirement party.

Manage Your Risk

Risk is a delicate thing. Prevailing wisdom suggests young people should assume more risk in their investments because they have time to recover in the event of loss. However, it is also tied to total investment amounts and the overall makeup of your retirement portfolio. You should review your risk on an annual basis to ensure maximum payoff during retirement.

Financial security requires a robust plan. However, even the best plans can be derailed by an unforeseen health problem or other disability. Take time to look through every scenario for your future.