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Are you putting off today what you should have done yesterday?  Despite the world-wide pension crisis and the escalating need for retirement savings, the harsh reality is that there aren’t enough savings left to cover our retirement. While most people are unaware that retirement planning is essential for their future, very few are really able to feather their retirement nests. Most Americans can plan their vacations but are stymied at the reality to do the same for their old age. Reports suggest that 2036 is the landmark year in which all Social Security funds will be exhausted. This means that there will be no retirement planning opportunities left for future generations. Debt will hover around the life of the retirees and they may have to run to debt settlement companies and debt consolidation companies for help.

With the fragile economic state that the US is in now, people attend to their daily expenses first before saving for their retirement. Researches made by financial experts reveal that only about 15% of individuals save sufficiently for their post-retired years. Have a look at some tips that may help you spruce up your finances and cut your debts before retiring

  • Protect your emergency fund: Be aware that the very nature of an emergency expense is its suddenness and  the frequency and at times, severity, increases during the senior years. Thus there is a need to gradually enhance your emergency reserve based on  inflation levels and  changes in your expenditures. A well-planned emergency fund protects you from any financial disaster, allowing you to withdraw funds from your emergency reserves, without touching your other investment portfolio Don’t forget to replenish your emergency reserves as soon as circumstances allow.
  • Eliminate all your debt worries: Most financial experts recommend that people pay their debts while they’re still at work. Retirement greatly reduces your source of income and if you’re still paying your debts, this may take a toll on your retirement funds. That’s why  it is best to pay your debts while you have a fixed source of income..
  • Assess your retirement budget: The budget that you follow while you’re working will be vastly different from the budget once you have entered your post-retirement period. Visualize your retired life in advance and create a frugal budget that can be followed. Your daily expenses will be trimmed down as you no longer need to run to office every day. Craft your budget in a manner that will allow you to concentrate more on leisure, travel and health care needs depending on your priority.
  • Contribute to your employer-sponsored retirement plan: While you’re working, your employer must have offered you a 401(k) account coverage. Are you contributing money to this account? If your answer is no, you must start exercising your options on 401k since it is the best way to protect your post-retirement life. This fund will act as a rainy day fund, offering you various benefits from time to time.
  • Develop a withdrawal strategy: How are you planning to withdraw your funds during your retirement years? Is it annually, quarterly or monthly? If you choose Systematic Withdrawal Plan in mutual funds, you have to decide the way you’ll withdraw, whether through dividend or through interest. All such decisions will play an important part on the amount of money that you’re able to accumulate as a whole.

If you’re into investments, make sure you diversify your assets to avoid the ’famine effect’. Create a good relationship with your financial planner so that he may help you throughout the process of retirement planning and make the best decisions. Discover your monetary needs and consult a debt settlement company in order to avoid further financial discrepancies.

About The Author: Kenneth Parkar is a contributory writer associated with the Debt Consolidation Care Community and has written several articles for various financial websites. He holds his expertise in the Debt industry and has made significant contributions through his various articles.


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