Financial Tips to Retire Rich and Live Debt Free!

by Penn Ross on 06/02/2013

Image of a person cutting up credit card

If you’re nearing your 40’s, you have reached the juncture in life when it’s imperative to start solid and effective financial planning for retirement. Most of us desire to create a solid financial future for our kids, family members and for ourselves. However, it’s not possible to build your future on a “house of cards”. Although financial experts can help you solve your debt issues and debt relief programs exist to add professional assistance to help you get out of debt, avoiding debt is certainly the best approach. Follow these financial planning tips to avoid marring your retired life with debt and help you become financially free!

1. Enhance your cash reserves. Almost all financial planners are of the opinion that
that the first step to any financial planning is to establish an emergency fund. If you don’t want to resort to high interest loans, you should have a minimum of 3-6 months of your monthly income kept aside in a safe and liquid account. There’s no right or wrong behind this decision but, you have to take a vital step when it comes to building up your cash reserves.

2. Downsize your debt level. If you owe huge amounts of money on credit cards, student loans, or medical debts, don’t make the mistake of carrying it over to your post retirement period as this will be an enormous financial blunder. You have to repay your debts as soon as possible so that you don’t have to resort to professional debt relief options after you stop working and start living on fixed income.

3. Increase contributions to retirement funds. Ideally, you should have an employer retirement fund called the 401(k), some form of IRA or other account set aside for retirement. If you’ve been saving a portion of your income in this account, you should continue to do so and in case you still didn’t start, you should immediately take the step. The sooner you start saving money in a retirement account, the more time the money will have to grow. And, don’t withdraw money from this account before you reach your retirement age to avoid penalties.

4. Get yourself adequate insurance coverage. You should also get yourself adequately insured with basic insurance policies like auto insurance, health insurance and life insurance policies. Insurance coverage can help you avoid any disastrous events from ruining your financial future. Look for ways to save money on your policies so that you can keep them within your budget.

Thus, if you are approaching 40 years of age and haven’t already started some form of retirement planning, you should get started immediately! Debt is something that can snatch your peace of mind and mar your financial growth. Follow the above mentioned tips to help stay on the right path to financial freedom!

Related posts:

  1. Vital Tips to Repay Your Debt and Control Your Financial State
  2. Who Wants To Retire Early?
  3. Settle Your Debts and Start Saving Toward Financial Freedom

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