Individuals should start assessing their financial readiness five years before the retirement.
It includes checking adequacy of retirement corpus, boosting savings if there is a shortfall, and cutting unnecessary expenses.
They should also realign investments, reduce risk, and ensure they enter retirement with a clear financial plan.
5 Financial Must-Dos Five Years Before Your Retirement
Your retirement plan needs more frequent reviews and adjustments as you get closer to retirement. Review and adjustments can help in lowering the risk and meeting your goals while avoiding big mistakes
Summary
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When you reach the age where your retirement is just five years away, you need to get your retirement readiness checked without any delay. Status of your investments, debt, assets, and every other financial matter needs to be scanned. Here are some important financial things that you should do five years before you retire.
Check How Close Is Your Retirement Corpus To Your Planned Goal
With five years in your hand, you can get a clear view of how much corpus you may be getting in hand when you retire. If you see falling short of your planned goal, you may put some extra efforts like increasing your savings, cutting unnecessary expenses, realigning your investments as per the need and try to get closer to your planned goal.
Start Closing Your Debt
Count down for your retirement should start now and you should simultaneously initiate process to close your existing debts one by one. Start with expensive debts like personal loans and other loans that carry higher interest rate. Once you are left with bigger loans like home loans or loan against properties, then you may evaluate options of closing them early or to prepaying them so that you can start your retirement debt-free.
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Secure Your Retirement Corpus
If you have already reached the retirement corpus target then you must take steps to lower the risk. It’s time to secure your retirement corpus for the next five years and enter your retirement with full financial strength.
Choose Your City And New Home If You Want To Relocate
If you have a plan to leave your existing city or change your home location, then it’s better to choose your next home now. You may find it difficult to get a home immediately after your retirement, so planning well in advance can save you money and you can also get better options. If you already own a property where you would shift after the retirement, then start keeping a track of its repair and maintenance.
You are only 60 months away from your retirement, so you should be now able to keep complete control on your finances including insurance, investments and debts. If you have not updated your Will in the last few years, then do it now and make a habit of reviewing it once every year from now on.
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The author is an independent financial journalist
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