7 Things You Must Do if You’re Retiring Soon

Updated on: 14 Dec 2021 // 20 min read // Personal Loans
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Are you planning to retire in the next couple of years? Make sure you sort these things about before you retire. It can ensure a smooth transition into your retirement life.

1. Reduce Your Debts

As you retire, you experience a reduction in your income levels. Not all retirees get pensions. Therefore, it makes sense to clear your debts a couple of years before you retire. These debts include your Personal Loans Offers and Credit Cards. It is a great feeling not to have a single loan pending when you retire. In fact, the repayment schedules of various products of the banks are such that it coincides with the timing of your retirement. The housing loan might be the only one that could stretch beyond your retirement age. However, you should make a conscious effort to close your credit cards before you step into retirement.

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2. Have a Retirement Budget in Place

Having a retirement budget in place ensures that you do not overspend in the initial years after your retirement. If you have a pension, that’s a bonus – You have a steady stream of income flowing into your account. However, if you do not have one, it becomes essential to prepare your budget in advance. You should invest your funds in such a way that it gives you safe returns. At the same time, you should also ensure to have liquid funds to take care of your day-to-day expenses. A professional financial planner can help you draw a perfect retirement budget.

3. Review Your Insurance

Once you retire, you will not be able to avail the benefits of the employer’s medical coverage aid and reimbursements. You have to spend from your pocket. Therefore, you should anticipate your medical expenses and have a contingency plan in place. It is better to enroll in a health insurance plan early in life. Carry it right into your old age because this is the time you need it the most. Check out your health insurance plans and ensure that you pay the premiums on time. Take steps to insure your home as well.

4. Be Prepared for the Rainy Days

You can have your budget in place. However, untoward incidents can happen. It is better to prepare for such situations in life. Such emergencies can wreak havoc with your savings. Therefore, it is always advisable to have a cash reserve in the form of an emergency fund. In fact, you should start saving towards this fund much before you retire. The ideal size of the emergency fund is at least six months of your living expenses. It can help you tide over the tough days easily. However, make sure you have this fund in a liquid investment option such as a ‘Savings Bank account’ or a ‘Fixed deposit with a bank.’The objective behind it is that it should be easily accessible.

5. Rework Your Investment Strategy

As you edge towards retirement, you should change your investment strategy by focusing more on the risk aspects of your investments. It is okay to have risky investments when you are younger because you have the opportunity to bounce back in case something goes wrong with them. As you near retirement, you do not have this luxury. It is better to change your tactics and invest more in safe options. For example, you have a current asset allocation of 70:30 (70% in mutual funds and stocks and 30% in debt funds). As you come close to your retirement, you can reverse the ratio so that you have less exposure to the risky investments.

6. Work on Your Will

You have spent a lifetime to build up your assets. You would not like these assets to fall into the wrong hands when you are no longer around. You want your near and dear ones to enjoy the benefits of your investments. The best way to ensure it is to have a will in place. Consult a reliable lawyer and prepare a will in advance. You can make sure there are no family squabbles in the future.

7. Have Fun

Saving for your retirement does not mean that you should not have fun. Take a well-deserved break from your daily routine and have a great time. Travel to your favourite destinations along with your spouse and relive your younger days. It is a fantastic idea to set aside funds for this purpose before you retire from your job. For funding your travel dreams, Apply for a Personal Loan Online through MyMoneyMantra

Retiring from a good paying job requires you to make psychological adjustments to your lifestyle. However, if you plan your retirement correctly, you can make a smooth transition.

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