Financial Goals to Strive for Before Retirement

Everyone looks forward to the day they can retire. But there’s a difference in retiring with confidence and retiring with worry about your financial situation. Consider setting these money goals to achieve before the big day.

• Have enough saved to cover six months of expenses. You’ve probably been putting away money in retirement accounts or paying toward your pension for a long period of time, but you shouldn’t neglect having a reserve of cash around for emergencies or other unexpected expenses while you're heading into retirement. Having money immediately available in a personal account keeps you from having to try to hurriedly arrange withdrawals from retirement accounts that may be less liquid. You want your retirement account withdrawals to be well planned, as there may be taxes owed on that money.
• Pay off your home. Home mortgage expenses can take a big chunk out of your fixed monthly retirement income. If possible, pay off your mortgage before you retire. That way, you may be able to stretch your budget for the retirement activities you want to enjoy.
• Pay off credit cards. Paying off credit cards with high balances and high fees is a no-brainer, as those payments sap money from your fixed monthly retirement income. You don’t want your leisure time strapped to monthly payments, so eliminate credit card debt before you retire, and try to make sure you don’t incur more while in retirement.
• Have enough in retirement accounts to provide 80 percent of your pre-retirement income. As a general rule of thumb, you’ll want to have enough saved for retirement to provide income equal to about 80 percent of your pre-retirement income times the number of years you expect to be retired. That may be a long time, since many retirees live into their 90s. Social Security (if you qualify) and other income sources may also factor into your total income amounts.
• Information provided by Horace Mann Educators Corporation. This information is for general purposes only and should not be considered an individualized recommendation or personalized investment or tax advice.