Summary of this article
Close all outstanding loans before retirement to prevent cash flow stress.
Update your Will before retiring to align it with current assets and heirs.
Declutter finances for clarity and reduced anxiety post-retirement.
After retirement, you would not want to live in financial stress because of crucial financial matters left unresolved. Pending financial issues may cause anxiety, and uncertainties will always keep your retirement life at risk. So, it's better to resolve your financial clutter or pending issues before your retirement. Here are some important steps you can take for financial de-cluttering.
Reduce Your Debt Obligation
Try to close your debt obligations before you start your retirement life. Bigger debts, such as a home loan or a loan against property, should be carried into your retirement only if you have a regular income flow to repay them without disturbing your financial goals. Smaller loans, such as a personal loan or a car loan, should be closed before you retire. While reducing your debt is important, recovering the money that you have given others on a loan is also equally important.
Recover Money That You Have Lent
Every penny that you had earned would matter more than ever after your retirement. So, before you retire, you must recover your money from all the people to whom you had lent and not yet received it back. It will also help you in estimating your actual retirement corpus size and plan your retirement finances accordingly.
Time To Review Your Will
When was the last time you reviewed your Will? Just before your retirement is the best time to update your Will because you are in a better position to estimate your assets, and you can recognise your heirs more clearly. You can make changes in your Will as per your updated financial situation.
Conclusion
Financial decluttering can help you regain complete control over your financial independence. You can get a clear picture of your financial standing, which can help you make the right financial decisions during your retirement and thus avoid unnecessary risks. So, if you are close to your retirement, it's time to declutter your finances now!
