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How to Prepare Your Finances for Retirement

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How will you spend your retirement? Do you want to travel or simply enjoy the freedom of time at home without worrying about work? The sad reality is that if you’re like most Americans, it might not happen. 78 percent of Americans are “extremely” or “somewhat” concerned about affording a comfortable retirement. Nearly two-thirds worry that they’ll outlive their retirement savings, yet three-quarters aren’t confident they’ll receive Social Security benefits. A third of baby boomers, the generation nearing retirement, have $25,000 or less in retirement savings. The future might look bleak, but preparing today can help you secure your ideal retirement.

Choose the Right Retirement Fund

Image via Flickr by kenteegardin

Preparing for the future starts with selecting your retirement fund. Retirement funds take the guesswork out of retirement saving because they’re professionally managed by financial experts. All funds aren’t created equally though.

Some funds combine a variety of investment options, including stocks and bonds, into one user-friendly package. Users then withdraw an amount they set each month. These low-risk retirement funds don’t make a substantial profit but they’re very stable, so they appeal to risk-averse investors, especially those nearing retirement.

Managed funds provide a set monthly income during retirement. This monthly payout is typically reassessed each year, depending on the fund’s performance. There are low- and high-risk managed funds. Income-replacement funds, which pay out at a designated date, are another good retirement option.

People nearing retirement typically want security, but people planning their retirement early can afford to invest in high-risk retirement funds. These funds have a higher potential payout but may also fail. The risk is often worthwhile for people with enough time to generate more savings before leaving the workforce.

Consider how funds allocate their assets, their payout structure, associated fees, and risk to determine the best one for your needs.

Diversify Your Investments

While retirement funds provide a solid base, you shouldn’t rely on them completely. Diversifying your investments is the best way to protect your retirement savings against drops in different markets and to maximize your nest egg’s growth. Consider purchasing bonds, investment properties, and stock trading to diversify your retirement strategy. Again, the more time you have until retirement, the more risk you can take.

Create a Realistic Retirement Budget

A clear retirement budget gives you a clear goal for your retirement savings. Consider how much you’ll realistically spend on everyday expenses like groceries and utilities, as well as indulgences like travel, restaurant meals, and entertainment. If you haven’t paid off your home or don’t think you will before retirement, mortgage or rental expenses should also be factored in. Then consider your income, including retirement savings and Social Security payments. How long could your nest egg sustain you? Will you have enough to retire when you want to? And if not, what can you do to increase your retirement savings?

Reevaluate your retirement budget every year or so until you leave the workforce, as the cost of living, Social Security payments, and other factors will change over time.

So many Americans aren’t ready for retirement because they don’t plan ahead. In truth, you’re never too old to start thinking about your golden years. Put a financial action plan in place today in order to enjoy the retirement you’ve always dreamed of.


And BAM, another DEBT GONE!!!

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The twins both had plans all day today. Sea Cadet is doing his clinicals with work in a local hospital and ride alongs with the ambulance. History was working all day. And Princess enjoyed a down day in her room. I got a ton of stuff done:

  • I meal prepped for the week.
  • Cleaned my room and did laundry.
  • Caught up on work.
  • Played with the dogs.
  • Watched a show on Amazon Prime.
  • Took a nap.
  • Logged on and paid off my tax debt.

BOOM! Yes, you read that right. Another debt bites the dust!

And the exciting news is that I think by the end of the month, I will be down to my last three debts…

  • Student Loan
  • Car Payment
  • Credit Card

And I believe, I will have a good payment toward my credit card.

I didn’t actually review my finances. But I knew I had enough stocked away from #nospendjanuary and I just wanted that debt gone, so I just paid it! And that in itself felt amazing!

Man, it feels good. This is the final financial tie to my ex-husband. And while I won’t get the letter in the mail for a week or two. That burden is gone.

It’s been almost 12 years since we split up. And it has been hard financially. Looking back there are so many things I would have done differently. Well, maybe, as I was fearful and felt so guilty for failing at my marriage. I remained that way for a long time.

But I do wish I had bitten the bullet and gotten a lawyer from the get go. (I filed our divorce paperwork and did all the paperwork myself.) But it is finally over…over…over! It really does feel like this is a turning point in my life. Shaking that burden I have carried for so long. Now, I am only responsible for me, my choices and my debt. And that is like a breathe of fresh air.

Watch out world, Debt Free Hope is coming!!!!


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