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The Value of Peace of Mind

The mere thought of retirement can be overwhelming – to some, retirement may seem like they are being forced into uncharted territory, especially after a long career. However, retirement planning can make your life less complicated, especially at a time when you are meant to reap the benefits of years of hard work.

Retirement can be stressful, and stress is a window for other medical conditions to creep into your life, such as heart conditions, blood pressure concerns, etc. Hence, planning for your retirement in advance can help manage your finances better, and bring you peace of mind – particularly nowadays, when there is such uncertainty regarding medical care.

Let’s dive into a few tips for easily tracking your finances, and amplifying your investments.

Consolidate Some Accounts

The secret to living stress-free is often as easy as simplifying the finances in your life. Over the years, you may have accumulated a large number of credit cards, investment accounts, bank accounts, and savings accounts.

Given there are multiple statements, passwords, and cards to wrap your head around, managing your finances may seem like a colossal task. Managing multiple accounts can become incredibly tiring after a while, especially at the time you are meant to be enjoying your life.  Not only that but if you’re married, it can be a chance for lost retirement income if both spouses are not up to date on each account.

As you reach your retirement age, using only 1 credit card and combining your cash can often translate to effective management of statements and finances. It is better to minimize your accounts, and shift to a primary account for easier tracking and paying off your debts.   If you plan to take our advice here, it’s best to meet with a financial planner first and then move the money.

Ideally, transfer all assets to one institution, and limit yourself to only one saving and checking account. As a preventive measure, hold on to one card you’ve had the longest, and cancel the rest. Hence, you should have only one credit card, and one reward card. Cancel any credit cards you may own with high-interest rates – especially those leaning in the 18% bracket.

Consider Fixed Income Annuities

Annuities can bring a sigh of relief to retirees who worry about loss of income post-retirement, particularly those without pensions. These are products that usually offer a fixed income over investment, and may last over the years, providing a steady flow of income through your retirement.

By paying an upfront amount initially, you can secure a stable stream of income until the annuity period reaches its end. Additionally, these are simple to withdraw and easy to manage, hence, moving your scattered investments to annuities is the smart move.

However, it is recommended that you study which product best suits your needs, its associated fees, and the implications of purchasing an annuity.   The negative connotation around annuities can be true if you end up in the wrong one, however, if used right these can be a great asset.

Boost Social Security Payouts

A social security retirement plan is a useful add-on to the income you earn post-retirement. Basically, you are paid a certain amount for the hard work and taxes you have paid throughout your employed life. However, the amount of earnings needed to qualify for social security credits increases every year, while early retirements reduce earning potential.

Ideally, applications for benefits need to be sent four months before the date you wish to receive your benefits; however, to maximize your earning you can delay the payout period till the age of 70. These decisions are non-reversible, and have a lasting impact on your benefit payout. Hence, it is recommended to coordinate the date with your spouse’s to maximize your payout benefits.

All benefits take inflation into account, and in a shaky economy, would mean little in terms of actual value. Therefore, we advise that you speak to a professional who can guide you on the best available options, suited to your retirement expectations.

Take Advantage of Tax Benefits

Filing your taxes is a difficult task, especially due to the complicated steps adding to your daily stress and anxiety. However, consolidated income streams can make taxes simpler for you. Also, holding income in one place such as a tax-deferred retirement account may result in hassle-free withdrawals during tax time.

Irrespective of how you plan on tackling your retirement, planning and better control over your income is key to having an easy and peaceful retirement. Small steps such as cutting down excessive spending, getting rid of credit cards with high interest rates, and consolidating your scattered investments can streamline your expenses – thus, giving you peace of mind.

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