Redefine, Reduce, and Retire?

That’s the plan!

Fixed incomes, assets, inflation rates, portfolios, annuities, future earnings, retirement savings, and mortgage rates are all buzzwords often associated with financial planning. Add these to national debt, social security, or tax reform, the tug of war between retirement and reality can appear daunting.   While reducing debt and redefining financial expectations have immediate benefits, thinking about saving enough for retirement does not always equal relaxation…at least at first.  But if practice makes perfect, setting goals now for later can reduce anxiety and realign long-term focus to bolster more confidence in the reality of retirement.

Redefine – Define again or differently, to give a new meaning.

A top financial goal for potential retirees is to manage money better.  Year after year, saving more and spending less is a common cornerstone for a solid financial future. retirementWith this in mind, determining the best financials goals can seem like a guessing game.  Understanding your finances is a necessary thing, but managing cash flow and creating a budget for future success in another.  Traditional retirement planning emphasizes understanding how much money you have, how much you spend, how much you have now, and how much money you will have in the future to continue to live a comfortable life after leaving the workforce.  Making positive changes in financial behavior now includes establishing and following a monthly budget, putting less money on credit cards, and investing more money for retirement.  Although arriving at the ideal retirement number can seem like a guessing game, the combination of current and future retirement savings, Social Security, and pension is a rough estimate of almost all of your potential income.  Other options for rough estimates include online retirement calculators such as http://www.kiplinger.com/tool/retirement/T047-S001-retirement-savings-calculator-how-much-money-do-i/ provide invaluable insight to get you started.

Reduce – make smaller or less in amount, degree, or size.

When this applies to credit cards, outstanding loans, and high interest rates, reducing is a really good thing.  One way to pay down a credit card balance and paying the least amount of interest is to stop it at the source.   An option can be to find a new card, often through your very own bank, reduce debtoffering a long “0% introductory annual percentage rate balance transfer” (usually as a promotional offer, for a limited time) and transfer your high interest credit card balances.

Finding the right card, some offering as much as 18 months of no interest for new customers, is key to an interest-free window of opportunity to pay only principle balances and temporarily stop interest charges in their tracks.  During this window, regular payments reduce the bottom-line debt amount without paying large dividends to interest.  Even with making the same payment amount, paying debt with no-interest is a big step to reducing, or getting rid of, your credit card debt completely.

Retireleave one’s job and cease to work, typically upon reaching the normal age for leaving employment.

Retire.  One word.  A verb.  An individual action.  Millions of possibilities.  From the dollar stretcher to the independently wealthy, retirement looks and feels different to everyone.  A person may retire and whatever age they choose, but common determine factors are tax laws, pension rules, and social security benefits that “mature” when a person reaches their country’s retirement age.  Currently in the United States, retirement age is defined as early retirement at 62 and normal retirement at 67 years of age.  But what does retirement really look like?  For some it looks like cruise ships and world travel, for others golf courses and new hobbies.  It may be a first chance to be an entrepreneur through starting a family business or writing that long-awaited novel you’ve always dreamed of writing.  Regardless of what retirement means to you, creating an effective and satisfying retirement plan and getting your financial house will get you closer to the goal… time to relax.

– Susan Amsler
– May 20, 2017

Randolph Business Resources, LLC.
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