An excellent rule-of-thumb as you plan for retirement is to re-evaluate your personal finances at least once a year. What better time for a clean start than springtime? As April showers give way to May flowers, follow a few simple guidelines to keep your financial life blooming.
Debt reduction is a primary focus for a healthier financial life. Work towards paying off large bills. Setting up automatic deductions from your checking account will simplify matters. Also revisit your monthly spending habits and eliminate small things like specialty coffees and mid-day snacks; the savings you make can be used to help pay down debt.
It is always wise to keep your eye on your asset allocation. Retirement savings and investments tend to change value over time. As you age, you want to protect your earnings, but not eliminate growth potential. The stock market has had a strong run and your portfolio is likely in need of some readjustments.
Many experts sing the praises of a Roth IRA. The Roth IRA allows you to make after-tax contributions that grow tax-free and retirement withdrawals are also tax-free. The tax advantages and flexibility of a Roth IRA make it an attractive option for retirement planning.
Consider life insurance with a guaranteed purchase option. While the exact type of insurance you require varies upon your immediate situation, the guaranteed purchase option allows you to buy additional coverage at specified times, regardless of your health.
Spring, with its emphasis on rebirth and growth, is an excellent time to revisit your financial situation and make necessary adjustments. The choices and changes you enact now will reap benefits for years to come.
Source: The Street