Many people have been working for decades before they retire. Some worked in jobs that were physically demanding, while others went for career paths that put them sitting at desks in office buildings. No matter what your career path, retirement is probably on your mind.
Young professionals might not think too much about it because it won’t happen for a long time, but older professionals might be thinking of retirement and if they’ve done enough to get ready for it. No matter what stage you are in, here are the smartest things you can do before you retire.
Pay Off Your Home
If you do nothing else, this is critical. Many people are using HELOC to pay off mortgage debt, and it’s making a huge difference. Living in a paid-off home means that you have a safe space to live in and that’s important. As you grow older, it means that during lean times you won’t need to choose between the mortgage or eating food. You’ll rest comfortably in your home while still being able to eat. It also means that you won’t be susceptible to rising rents or getting kicked out because your landlord wants to sell. Paying off your home before retirement will also free up income that you can easily use for travel and other comforts after you retire.
Get Out of Debt
Not only should your house be paid off, but your credit cards, car loans, and other debts should be taken care of as well. Prioritize getting out of debt before retirement so that you aren’t still paying on debts. This will give you more freedom to go places, enjoy your time off from working, visit family and friends and so much more when you leave your career. Debt becomes something that ties you down, eats into your hard-earned retirement funds, and makes it challenging to live as comfortably.
Create a Passive Stream of Income
While you may be retiring from your full-time career, it doesn’t mean that you can’t make some money on the side. Passive income is income that you put very little time into earning but then makes you money even while you sleep. Some people use a network marketing business or become Amazon FBA sellers to accomplish this. Other options for passive income include investing in rental properties, becoming a course creator, and even creating an app to sell. Passive income is nice because once you create the product and put it on the right platform, it can virtually sell itself.
Make Savings Priority
You might enjoy the finer things in life right now, and that’s okay. But amidst your extravagant lifestyle, make it a priority to save money. Your savings and investments can be used to live on later in life. It also helps you create good financial habits and the disciplines necessary for being more secure in retirement. You’ll learn to prioritize your wants, needs, and financial future better when you prioritize putting money aside. It can also help you avoid getting into debt for frivolous things. When you know you have to save up for things, you’ll be more discerning when to buy something and when to wait.
Read Also: 3 Tips for Small Business Owners Preparing for Retirement
Learn Different Investment Strategies
Putting aside money into your 401K at work and getting an annual match is a good strategy. But in the world of investing, there are many different strategies to help you leverage your money to earn more money. Investing is different than saving. Saving is simply setting money aside while investing is all about making more money with the money you have. You can invest in stocks, bonds, real estate, and so much more. Entrepreneurs like to invest in a variety of businesses as well. In your process of planning to retire, leverage multiple investment strategies so that you aren’t at risk of losing everything.
Preparing for retirement is about setting yourself up financially for your future when you’re no longer earning a full-time income. In addition to making smart financial decisions, make sure you’re planning for the future you want. Make a bucket list of all the things you want to see and do and how you plan to live your life in a new era without work. Will you volunteer? Take trips? Or will you simply relax and enjoy the people in your community?