To prepare one’s old age, there are no miracle recipes, it is better to save a minimum, to invest but especially to put in place a suitable strategy. The solutions seem many, but only some are really effective to minimize your efforts and maximize your future income … because in reality, there is no point in saving significantly if the investment you chose turns out to be a financial pit.

Your house is free of mortgage

When you no longer have to pay a mortgage, you can use the money you spend each month on it in different ways. By having a house free of mortgage, you also have a financial safety net. Indeed, if you run out of cash, you can always: rent a part of your house and enjoy the rental income; move to a smaller home and live off the sale; or take a reverse mortgage (but watch out for important fees and strict rules).

Your children are financially stable and independent

One day will come a time when you should stop worrying about your children and where, hopefully, it will be up to them to worry about you. In an ideal world, neither parents nor grown-up children should have to support themselves financially, but life sometimes surprises us. So, if you’re still paying money to your kids, maybe it’s not a good idea to quit your job right now.

You have tested a realistic retirement budget

According to a recent study, a retiree spends approximately $ 2,400 per month, including $ 668 for housing. Try living with that amount for six months. If at the end of this period you are not scratching the drawer funds or, better, if you managed to make a surplus at the end of each month, you are probably ready for retirement.

You have multiple sources of income

Part-time job, freelance career are all sources of income that can help you overcome a potential liquidity problem. The ability to tap into different earnings can make the difference between a stressful retirement and a carefree retirement. The trick is, of course, to manage these revenues effectively so that they have the least impact on your taxes.

You can survive a market downturn

Young investors welcome market downturns because they offer opportunities to do good business with long-term growth. Retirees, on the other hand, need access to their money now and cannot afford the luxury of waiting for their investments to rebound. Talk to your financial advisor to make sure you have the best strategy for dealing with a bear market.

Your job affects your health

According to an Angus Reid poll, less than half of retirees retired when they planned to do so. The rest retired earlier (48%) or later (6%) than expected, for reasons beyond their control. In truth, we are not masters of how we age. There is no shame in changing plans to ensure a longer and healthier retirement, especially if you checked off some of the items listed above

Saving to supplement your retirement pension

Longer life expectancy, unemployment … For several years, the pension system has been undermined. The supplementary pension scheme, which already makes up for the inadequacy of the basic pension amounts, is often no longer sufficient to offset the loss of income linked to retirement.

Regardless of your status today, it is strongly advised to save to ensure sufficient income at retirement age. Some companies offer their employees savings plans (PEE, PERCO) that allow, thanks to contributions paid regularly and under favorable tax conditions, to have a capital (or a life annuity) at the time of the retirement.

How to choose the best financial investment for retirement?

Some of its financial products will have medium-term objectives, others long-term. To subscribe to one (or more) product (s) rather than another, you will have to take into account:

• Your age at the time of subscription. If you are close to retirement age, is a long-term investment really the best choice?

• Estimate your needs in the future

• Take stock of your current investments (if you have any) and their returns. Are they still interesting?

• Evaluate the amount of your retirement pension (basic and supplementary) in order to know how much you will have to supplement it.

Budget optimization

The first step in managing your savings in early retirement is the realism of your budget. The money you hid should not last more than 20-30 years if you retired in the mid-60. Find out how much you can reasonably afford to spend each year, depends on what you saved, your life expectancy and what you expect from your expenses.

“How much annual income do you need to retire?” If you cannot answer this question, you are not ready to decide on retirement. And, if more than a year has passed since you thought about it, it’s time to reconsider your calculations.

Plan medical expenses

Senior citizens have the right to register for Medicare coverage, starting from three months before reaching the age of 65. If you retire before that, you are responsible for maintaining your health insurance until Medicare starts. Costs may be low if you are relatively healthy and all that you pay is a monthly premium, but the costs for pocket expenses can soar if you have a serious health problem.

Conclusion

Successful attainment of early retirement means considering the financial aspects of this issue from a slightly different perspective. The longer your retirement forecast, the more important it is to have a roadmap for how you will spend what you have saved.

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