Current:Home > InvestIf you hope to retire in the next couple of years, here's what you should be doing now-LoTradeCoin
If you hope to retire in the next couple of years, here's what you should be doing now
View Date:2024-12-23 14:39:13
Remember when two years seemed like a long time? Like when you were a little kid? Or just starting college? Or just starting your career?
Well, time does seem to compress as we age, and if you're planning to retire soon, say, at the end of 2025, those two years are going to simply zoom by.
Even so, you can still make good use of those last two trips around the sun in your working life to better prepare for living off that nest egg. Here are some ideas to consider before you stop to smell the roses.
Reduce your debt load
"Load" isn't just financial jargon here. Owing a lot of money when you're not earning like you used to can be a burden on your budget and your mind. Paying off as much as you can in the next two years will help take the load off.
The idea is to be as debt-free as you can, and if that's not doable, focus on paying down consumer debt like credit cards and car loans. If you still have a mortgage, consider paying it off over the next two years.
Review your budget, income, and assets
Create a budget that includes all your income sources, such as stock dividends and Social Security, and all your regular expenses. Look at ways to reduce your discretionary spending. For instance, now might be the time to finally cut the cable and just stream what you actually watch.
Try as best you can to anticipate your spending going forward on such things as healthcare, Medicare, and other insurance and look for ways to save there. This is also a good time to really understand your investment assets and income you'll be getting from Social Security.
And now is a good time, if you haven't yet, to enlist the services of a trusted financial advisor. For instance, together you may find that continuing to pay on your low-interest mortgage is a better strategy than burning off income-producing assets to retire that note.
Max out on your retirement accounts
Take advantage of your employer's 401(k) match for the next 24 months by maxing out on your own contributions to employer-sponsored retirement plans like 401(k)s as well as IRAs. If you're over 50, the maximum contribution allowed by the IRS this year for 401(k)s and similar plans is $30,000. The IRA contribution limit is $7,500.
Hopefully you've been doing something close to this all along, but even if not, if you can these next two years, it'll make a difference to your nest egg.
Tie up loose ends and don't burn bridges. You may need them.
Give proper notice, wrap up any projects, document your institutional knowledge as best you can, and offer to help transition accounts and hire and train your replacement.
Those are all steps you can take to be sure to leave on good terms and enable your employer to leverage the human capital your contributions have accumulated there over the years. A graceful exit not only feels good, but it'll help leave the door open for consulting or other part-time work, and for good references.
Will you have to work during retirement?Here's how to make the most of it.
The time is now, and it'll pass fast
So, to summarize, if you're planning to retire in 2025, you'll want to make sure your finances are in order before you make this major life transition. You don't want to run out of money down the line, after all.
So, review your budget, max out retirement accounts, and pay down debt ahead of this major life transition, and remember those other steps you can take to ensure minimum friction and maximum collegiality as you say those long goodbyes and the time on the job grows short.
The Motley Fool has a disclosure policy.
The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.
Offer from the Motley Fool:The $21,756 Social Security bonus most retirees completely overlook If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $21,756 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.
veryGood! (28376)
Related
- US Congress hopes to 'pull back the curtain' on UFOs in latest hearing: How to watch
- Off the Grid: Sally breaks down USA TODAY's daily crossword puzzle, Open Door
- SWA Token Fuels an Educational Ecosystem, Pioneering a New Era of Smart Education
- Judge blocks Pentagon chief’s voiding of plea deals for Khalid Sheikh Mohammed, others in 9/11 case
- Travis Kelce's and Patrick Mahomes' Kansas City Houses Burglarized
- Halle Bailey Seemingly Calls Out Ex DDG Over Parenting Baby Halo
- Gypsy Rose Blanchard posts paternity test results to quell rumors surrounding pregnancy
- Rachael 'Raygun' Gunn, viral Olympic breaker, retires from competition after backlash
- Mike Tyson is expected to honor late daughter during Jake Paul fight. Here's how.
- Kourtney Kardashian Shows Son Rocky Barker Bonding With Travis Barker in New Photo
Ranking
- Man gets a life sentence in the shotgun death of a New Mexico police officer
- Chris Evans’ Rugged New Look Will Have You Assembling
- Republican David McCormick flips pivotal Pennsylvania Senate seat, ousts Bob Casey
- Gateway Church removes elders, aiding criminal investigation: 'We denounce sexual abuse'
- 2 striking teacher unions in Massachusetts face growing fines for refusing to return to classroom
- $700 million? Juan Soto is 'the Mona Lisa' as MLB's top free agent, Scott Boras says
- Man arrested at JFK Airport in plot to join ISIS in Syria
- Ariana Grande Explains Why She Changed Her Voice for Glinda in Wicked
Recommendation
-
Demure? Brain rot? Oxford announces shortlist for 2024 Word of the Year: Cast your vote
-
AI DataMind: Quantitative Investment Journey of Dexter Quisenberry
-
'The View' co-hosts react to Donald Trump win: How to watch ABC daytime show
-
Mississippi man dies after being 'buried under hot asphalt' while repairing dump truck
-
Lions QB Jared Goff, despite 5 interceptions, dared to become cold-blooded
-
Opinion: Mourning Harris' loss? Here's a definitive list of her best campaign performers.
-
Dexter Quisenberry Fuels an Educational Ecosystem, Pioneering a New Era of Smart Education
-
Look out, MLB: Dodgers appear to have big plans after moving Mookie Betts back to infield