Today’s Hack:
Are you prepared for retirement? Reaching these milestones before you get there will ensure you transition to retirement with ease.
Other Retirement Facts:
A recent article from USA Today listed four different milestones you should reach before retirement. Have you achieved all of these? Does Phil agree with all of these markers?
To start, you know how to budget well. How intense does that budget need to be? In retirement, do you have an understanding of where the money is going and how much you need?
Once you understand where the money is going, you may need to cut back in certain areas. Showing you have control over all areas of your finances is important before you are no longer working. Once you are in retirement, what you have is what you have. So, what needs to be built into your budget? And what do you need to learn to live without?
Do you have an emergency fund? It’s important to have three to six months now, with the general concept being to cover a loss of job. From a retirement standpoint, you are more concerned about liquid funds available in case of a needed home repair or an opportunity that presents itself.
Are you carrying balances consistently on a credit card? Some say to rid yourself of all revolving debt before retirement. Phil sees some benefits on a credit card between the rewards or the buffer of safety. Make sure though that you are realistic with yourself enough to know if you are able to manage this debt responsibly.
With all of this, it helps to have a plan! Work with an advisor to create a plan that is unique to you and your situation as you head toward retirement.
Listen to the full episode or click on the timestamp below to see if you are hitting all of the milestones you need before retirement.
0:49 – Four milestones that signify you are ready for retirement.
1:37 – #1: You can budget confidently.
3:35 – #2: You have control over your spending.
8:00 – #3: Have an emergency fund.
10:13 – #4: Have no revolving debt.
12:39 – Bonus: Have a plan!