Retirement should be a time for you to relax and focus on enjoying every aspect of your life. Before you retire, analyse your finances and consider streamlining and consolidating your finances to reduce stress and financial overwhelm.
Here are some essential tips to facilitate the process of simplifying your finances for retirement.
Automate Your Payments
You might be accustomed to dealing with your payments manually, however, if you want to experience a quiet life, make things easier by setting up automatic payments.
Your light bill and other important expenses should be automated to provide you with more free time to enjoy your retirement. If you don’t already have automatic payments set up, contact your bank and initiate automatic payments for all of your regular bills.
The world has gone digital, financial institutions and banks have set up digital systems in order to simplify the way we do our banking. Some banks even have Online checking account facilities where you can manage all your money online without having to go to a physical bank. This is a convenient way of banking, especially for retirees. If you haven’t already opened an online account, now might be the best time to open one.
Consolidate Your Bank Accounts
Take a look at your bank accounts, do you have too many? If so, reduce them down to one for bill payments, one for savings and for leisure.
If you have any debts, pay them off as quickly as you can. Entering retirement with debt is stressful and it defeats the object of living a peaceful life when you retire. Therefore, if you are approaching retirement age, create a realistic plan to drastically reduce your debt before you retire.
Create an Emergency Fund
Create an emergency or contingency fund that is separate from your other finances to prepare for emergency spending. Covid-19 was a cold, hard reminder of how important emergency funds really are. If you don’t already have an emergency fund, start building a $1000 emergency savings pot. Then work your way up from there. Emergency funds can provide you with a much-needed lifeline in the unfortunate event of an emergency.
Aside from building financial freedom before you retire, one of the best things you can do is to simplify your finances. Many people approaching retirement age have complex financial plans and systems that might not be the most efficient way of managing your finances as a retiree. Therefore, it is vital that you consider simplifying your finances by reducing the number of bank accounts that you use. Also, consider taking advantage of online bank accounts and automated payment features to reduce the stress of making manual payments every month.
If you are currently in debt, create a solid plan to reduce your debt significantly before you retire. Even if you can’t pay all of your debts at once, try and pay most of them before you retire. If you don’t have an emergency fund, consider creating one to prevent financial burden if something unexpected happens.