Here are seven financial tips to help you enjoy life and reduce stress as you approach retirement.
1. Get serious about your retirement: If your employer matches your 401(k) contributions, you need to take advantage and max out your contribution. Your employer’s share is “house money,” which means using their contribution as part of your 401(k) plan as an employee benefit. Many 401(k) plans allow for conversion to a guaranteed retirement income which can be used as a lifetime benefit. Ask your benefits manager to see if it is included in your plan. It would help if you also planned at what age you would like to retire. If you have had a loss in investment returns in your 401(k), ask yourself how you can gain that back. Your asset allocation in your 401(k) can be changed as you get closer to retirement age. Most plans allow you to move the money as a rollover to a self-directed IRA, which provides the option of using an annuity with an “Income Rider” attached to provide desired guarantees. If you have an IRA and are not contributing annually, start this year; contributions made before April can be deducted from the previous year’s income.
2. If you don’t have a will, see an attorney and make one. If you have a current will make sure it is up to date.
3. Name an executor for your estate. Use caution in the selection, and make sure you have asked the executor for permission to use them. Based on the valuation of your estate and your state of residence, the use of a trust can assist the executor in their responsibilities. Ask your attorney for ideas and help. Never buy a trust from anyone other than an attorney licensed to practice law. Often life insurance is used to provide funds for any taxes or debts that may be due at your death, have a professional insurance review the policies, and make sure the ownership and beneficiary decisions are up to date.
4. Create an emergency fund. Only 28 percent of people have an emergency fund, according to a 2022 Bankrate.com survey.
5. Take a close look at your investments and review them for changes. Remember, as we get older, we have less time to make up losses in our investments.
6. Start paying down debt. Debt can be a drag on your retirement; once the debt is retired, stress becomes less, and your options for life increase.
7. Budgeting and following a monthly plan can help. There are numerous studies about budgeting; one thing is for sure, people who follow a budget have less stress. Make a budget and stick to it.
Life should be enjoyed. Use these simple financial tips as the first step to regaining financial freedom and reducing stress.
Brad Pistole of Ozark, Mo., is farmer and a Certified Financial Fiduciary®, Certified Annuity Specialist®, and CEO of Trinity Insurance & Financial Services, INC.