Nearing Retirement? Time to Fortify Your Finances

Your financial goals for retirement can seem far off, but follow the steps below and you will be able to achieve them:

1.      Save More: Tax-free growth is a sure-fire way to boost wealth. Contribute to Health Savings Accounts, which can be used as a long-term savings plan for retirement as well as for storing money for medical expenses. Experts also recommend paying for things with cash or checks, as that causes you to realize how much money you actually have. Contribute to your savings account every month.

2.      Bring Joy Back to Investing: Invest in stocks that you have actual interest in with extra money, and watch your investments grow. CNN Money recommends investing in LinkedIn, Skyworks, and Walt Disney.

3.      Make Your Home an Asset: Purchase a modest home at the lower end of your range. Over 30 years, this decision can save you six figures. You would save $162,000 by buying a $300,000 house instead of a $375,000 house, if you put $75,000 down and take out a 30-year mortgage with 4.4% interest. Also, consider renting out a property if you can do so. The average monthly rent in the United States is $1,089, versus the average monthly mortgage which is $900.

4.      Invest Against the Grain: Invest in slower economies to reap bigger gains, and boost your stake in undervalued small-company shares (which have historically outperformed).

5.      Use Funds to Tap High Municipal Yields: According to CNN Money, “Tax-exempt municipal bonds now offer a yield of more than 2% for intermediate-maturity issues, versus and after-tax equivalent of about 1.5% for regular bonds”.

6.      Cut the Cost of College: Cut your college student’s cost of living by considering co-ops rather than dorm rooms, pick a less selective school to get more aid, and invest in 529 savings plans for children.

7.      Boost Your Income: Know the income you will have at your disposal come retirement time. CNN Money notes that 35% of 401(k) investors who become aware of their income after retirement change their savings habits, and three-quarters of those people boost their savings an average of 25%.

For the full article from CNN Money, follow this link.