It’s easy to feel anxious approaching middle age if you haven’t exactly been frugal in your earlier years. Even if you think you’re at a disadvantage, you still have enough time to turn your financial picture around. Focusing on your long-term financial picture will help you make good decisions as you enter your later years. Check out the following five fiscal tips for people approaching middle age!
1. Update Your Life Insurance Policy
The deeper you get into middle age, the fewer excuses you have not have insurance. As you approach the second half of your life, you need to ensure you have enough coverage for your personal and family needs. A good benchmark is to have an insurance policy worth between 7-10 times your salary.
If you’re healthy, now is the best time to upgrade your insurance. Certain term life policies allow you to retain your current health status through the life of the policy. Even if you fall ill, your policy and rates won’t suddenly change. Whole life insurance policies are more expensive than term insurance; however, you have the ability to tap into the cash value while you’re still alive.
2. Start Planning For Retirement
Retirement may seem far away, but planning ahead is how you make the most out of your free time. Make a list of some goals you want to achieve during retirement and some things you want to do. Having a clear idea of what your retirement will look like will motivate you to start planning. Make sure you calculate how much money you need to sustain your current lifestyle. Planning ahead makes a huge difference and prevents you from getting caught off guard.
3. Pay Down Your Debt
As you approach retirement, you want to do your best to limit debt. Paying down debt while retired limits how much fun you can have. It’s a good idea to make it your goal to pay down your debt a few years before you plan to retire. Tally up your credit card balances, personal loans, car loans, mortgages, and budget a way to pay them off.
If you can enter retirement without a mortgage or car payment, you make life significantly easier for yourself. If you don’t have to pay for a place to live or transportation you can live on a lot less income. If it’s looking like you can’t pay off your debt before retirement, consider debt consolidation at a lower interest rate. Debt consolidation can help you make quicker progress on paying off what you owe.
4. Keep Learning
Being financially literate makes it easier for you to manage your finances. With money becoming rapidly attached to technology, it’s essential to stay up to date with what’s going on. Even if you’re not using all the new advancements, it’s still a good idea to stay current. Reading financial articles, doing your taxes online and keeping up with the industry on social media are all ways you can keep learning.
5. Set Your Will From Now
Establishing a will is especially important if you’re raising a family. Nearly half the population over the age of 50 still doesn’t have a basic will. This creates a lot of turmoil and unnecessary confusion when they eventually pass on.
You can consult with a lawyer; use an online service or use a preprinted will that you can buy at the store. It’s a good idea to get a professional to help you through the process. You’ll need to take inventory of your assets and decide how you want them handled after you’re gone. Your will can also include requests for your funeral and who you want to represent your estate.