How to plan your retirement

As you approach your retirement, here are some tips to help you organize yourself to be ready to go the distance in style — or at least as much style as you can afford. Assess your situation. Don’t go into retirement just hoping that everything will

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  • As you approach your retirement, here are some tips to help you organize yourself to be ready to go the distance in style — or at least as much style as you can afford.

  • Assess your situation

  • Don’t go into retirement just hoping that everything will work out. Take control of your situation by assessing it carefully before you actually retire. Determine how much money you have and how much income that means you can expect from your money.

  • Look at your housing; do you own your home? How big is your mortgage? In what city would you like to retire? If your only hope is social security, your plans will be quite different.

  • Own a home

  • If you have a home in a place you like, you’re in great shape. The best retirement advice you can get is to own a home free and clear. Having a virtually free place to live will give you peace of mind that is worth a fortune.

  • Get out of debt

  • If you have debt, pay it off. Use your assets, even if you have to sell them, to get out of debt. The only exception to this rule would be if your only debt is a very small mortgage on a modest home. If you have a mortgage on a big home, it would be a good idea to sell the big home and buy a small one that doesn’t require you to have a mortgage.

  • Remember that even though many financial planners will point out that you can earn more on your money than you are paying on your mortgage, that is a false comparison. Paying off your mortgage provides a risk-free return. Anything that yields a higher expected return is a risky asset that could go down in value. Borrowing money to make an investment using your home is a risky bet — especially in retirement when you are spending your money.

  • Match your expenses to your income

  • If you have limited retirement savings, you’ll want to look for ways to reduce your spending. The first place to look is in the garage. Your cars are likely costing you $500 per month — or more — even if you paid cash for them. The depreciation is a silent stalker that steals your money when you aren’t looking.

  • If you have always had two cars, see if you can get by on one in retirement. You may also want to look for lower cost communities or living closer to your children. Living close to your kids may save money going to visit your grandchildren and could reduce your cost for care as you age — presuming your children might pitch in some volunteer care to keep you out of a care center longer. Virtually nothing will burn your money faster than being in a care center.

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  • Consider a reverse mortgage

  • If you are out of cash at 75 but are healthy and own your home, it may be a good time to take out a reverse mortgage. A reverse mortgage is expensive to originate, but you can pledge your home and receive an income each month. So long as you take care of the home, you can’t be kicked out of it to pay it off. The income from the loan can go a long way to keep you afloat once you are well into retirement.

  • Few people are as ready for retirement as they’d like to be, but often the decision to retire is forced upon people as they are eased out of the work force later in life. Take some time as you approach retirement age to make specific plans so that you can enjoy your retirement as much as possible.

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Devin Thorpe, husband, father, author of Your Mark On The World and a popular guest speaker, is a Forbes Contributor. Building on a twenty-five year career in finance and entrepreneurship that included $500 million in completed transactions, he now champions social good full time, seeking to help others succeed in their efforts to make the world a better place.

Website: http://www.yourmarkontheworld.com

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