So, you’ve been preparing for your retirement for decades and now it’s finally within arm’s reach.
While you think you’ve already got all your bases covered, there might be a couple of other financial moves you can make right before your planned retirement to make your later years more comfortable.
Finish Paying Your Mortgage
Retiring debt-free is something that many people aspire to. Not having to worry about affording your monthly repayments is certainly worth working hard today to get rid of high-interest debts like personal loans and credit cards.
One other debt you should strive to pay off before you retire is your home mortgage. With housing expenses already taking up a good portion of your budget, cutting that figure by having your mortgage paid off would free up money you can spend on other necessities.
And while you will still need to pay other housing-related costs in the absence of a mortgage, those would be significantly cheaper than the tens of thousands of dollars you’d pay for a house loan.
Secure Two Years’ Worth of Cash
If you have some of your retirement savings tied up in volatile investments such as stocks, then you might be worried about what the market would be like by the time you retire.
Since you can’t really predict whether your investments would be in the red or not, it’s recommended that you save up at least two years’ worth of your necessary expenses in cash. Having this safety net would prevent you from making bad moves due to panic when the market does unexpectedly take a nosedive.
In the end, you may not need to set aside such a high amount, especially if you can rely on fixed retirement income sources like Social Security and pensions.
Assess Your Investments
Speaking of investments, it’s important that you reassess your portfolio a few years before your planned retirement. One thing you should ask yourself is whether you’ll need to take on as many risky investments in your retirement as you did before it.
It’s likely that you’ll find it more beneficial to cut down on these types of investments as you shift your focus from asset accumulation to asset preservation. Experts recommend soon-to-be retirees to dial down their exposure to assets like stocks ahead of their retirement.