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- Anyone planning for retirement must have a solid financial plan to avoid any uncertainties in the remaining life.
- People moving closer to retirement age must reduce their exposure to equities and increase the percentage of bonds in the portfolio.
- In case, you do not have adequate retirement savings, the retirement decision can be delayed.
Are you nearing your retirement age? If yes, you must figure out how smooth can the transition be without any wrong move. In case you think your retirement savings are not on track, you can think about delaying the decision. Any decision made in haste can be detrimental for your future prospects.
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Five mistakes to avoid:
Entered 60s? Not always a sign to retire
Just entering 60s doesn’t automatically mean that it’s time to hang up your boots. Just because others have decided to retire may put pressure on you. Unless you have a strong retirement plan in place, along with plans for healthcare costs and debt payment, you should continue with your job, provided the company has no other plans.
Don’t leave money on the table
An average employee changes jobs several times in his career. However, most employees are not aware of the fact that they are saying goodbye to their jobs without earning any benefit from the employer’s contributions. Complete ownership of the funds matched by your employer can not be claimed till you are employed with the company for a fixed period. It is generally a five-year period. So, shift the job only when the deadline has been met.
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As you near the last day at work, it is important that you carry out rebalancing of your asset portfolio. Rebalancing portfolio quarterly or annually is critical. People moving closer to retirement age must reduce their exposure to equities and increase the percentage of bonds in the portfolio.
Driving up debt just before retirement
The savings of people who drive up their debt just before retirement can be negatively impacted. So, you must keep your debt under control as you near your retirement day. Besides, you must repay your debt before you retire.
You must prepare a kit with all your financial statements for emergency purposes. The kit may include documents such as tax documents, social security statements, estate documents, an emergency fund of at least three to six months of living expenses, documentation of your insurance policies, such as health, auto and home, and a list of all phone numbers and passwords of your bank accounts.