Retiring in Ontario? Steps to Take Now to Prepare
July 6, 2017 | Posted by: Richard Allatt
Some adults begin planning and saving for retirement immediately after graduating college and entering the workforce. Others delay retirement planning, believing that they have several decades to save for their Golden Years. However, once adults reach the age of 30 or 35, many inevitably take a closer look at their retirement plans and make a more concerted effort to prepare for their retirement years. During this decade of your life, taking these important steps will help to establish a successful retirement years down the road.
Pay Off Your Credit Cards
While some retirees carry outstanding credit card balances, you will be more financially secure and require less recurring monthly income to sustain your lifestyle if you do not carry credit card debt. Now is the time to create a debt elimination plan as it provides you with ample time to carry out that plan. Likewise, consider taking steps to eliminate other personal debts you owe, such as car loans and student loans. The ideal goal is to be debt-free in your retirement years. When this goal is accomplished, your budgetary expenses will include only the basics like food, utilities, insurance payments and other standard items. Even if you owe a considerable amount of money right now in credit card debt, many years remain before you retire. Developing and following the plan now will make it easier to achieve a debt-free status by retirement.
Review Your Mortgage
While your credit card payments and other personal debts may be a large portion of your current budget, your home mortgage payment likely is also substantial. Review your mortgage today with a mortgage professional. If your current mortgage term extends beyond your retirement debt, refinancing to a shorter term mortgage may be beneficial. Some homeowners may also benefit from refinancing to pull equity out of their home for debt consolidation purposes. Others may lower their monthly payment by refinancing, and this may enable them to pay other debts off more quickly. Because each person's financial situation is different, the decision to refinance is a personal one. Contact Richard Allatt, a mortgage professional in Ontario, to consider the pros and cons of refinancing and to help you establish a mortgage that is most beneficial for your retirement goals.
Fund Your Retirement Account
At this point in your life, funding your retirement accounts is imperative. With the benefits of compounded interest, dividend reinvestments and more working for you over time, funding your retirement accounts earlier is beneficial. If you do not currently have a retirement account, now is a great time to open an account. If necessary, make adjustments to your contributions to take full advantage of an employer-matching retirement program. Use online retirement calculators and other similar tools to determine how much money you may need in retirement. Adjust your contributions accordingly to ensure you reach your goal. Revisit your accounts regularly to ensure that you remain on track with your savings.
Whether you have already started preparing for retirement or have yet to get started, this decade of your life is the ideal time to create a more focused, detailed plan. Following these important tips now can set the stage for success with your retirement planning efforts. With several decades still remaining before you retire, the power of time is on your side if you get started today.