Saving as you age might not seem like the most important thing when you are young but asking anyone who is pasted retirement age and they will tell you to do certain things. Obviously saving large amount of money is an easy piece of advice but there are things to do with your money as you age.
Move Investments To Less Risk
As a fixed income household after retirement it can be wise to take money out of the high risk stocks. Although this will impact the large amounts that could be made on the market it also thwarts the losses as well. A solid growth stock that always seems to produce dividends can be a nice constant stream of income for the holder. Mutual funds are also another safe way to make money. To be warned though, the safe route can work but you still have to pick solid mutual funds or consistent stocks.
Take A Certain Amount Out Of Your 401K
There are tax penalties each year if you do not take a certain amount of money out of your 401K. There is an age start to this and this is the age of 70 and each year you have to take out a certain percentage. This can be used as the money to live on for the year as it is a sizeable percentage. It can be lived on exclusively especially if you have employer match on your 401K and you put away a solid percentage each month for a multitude of years.
Establish A Living Trust
Living trusts are necessary for those who have beneficiaries who are minors. Many experts say that an inheritance shouldn’t be given to a person until they are at least 25. This is because many people that age lack the maturity to handle receiving that amount of money at once. A trustee would help pay for your child’s life and then give them the remaining money once they have reached the age that the parents agreed to release the funds and property to the child. This can be beneficial if you have lost the capacity to make your own decisions. Many people think that a living trust is about dying too soon but sometimes it can be about living too long. Eliminating a will contest is another benefit of this. This can be something that can cause a rift in a family and a living trust can help eliminate the grounds for a will contest.
End Your Mortgage Early
This might be something that you had to start earlier in your life but saving for retirement is much easier without a mortgage to pay. If you have been fortunate enough to pay off one house, then if your children have moved then you should consider downsizing. Passive income or mortgage payments can be made on a smaller home with rent money accumulated from the larger old home. This passive income can benefit your retirement fund quite nicely and when you are tired of having renters then you can sell your home or move back into it.
Autopay All Credit Cards
As you age it might slip your mind to pay your credit card bill. Setting up autopay will make sure no interest is taken for the next month and paying the complete bill is wise. The only reason to have a credit card is to reap the rewards of cash back or other rewards programs. Otherwise it can just cost extra money as forgetting a payment can hurt your credit along with your bank account. Cancelling credit cards is easy and finding new cards with lower rates and better rewards is something to investigate as you age as you have hopefully been improving your credit score.
Having all of these things in order as you age can be the difference between a stressful and comfortable retirement. This can even impact the age you retire at as a few bad decisions can take years to repair completely. Plan for your later years now and you will be able to enjoy them immensely!