11. Start to transfer wealth
Even people with modest incomes often plan to leave money to their children or grandchildren. Laws about inheritance taxes can change at the federal level and can vary from state to state. One of the most popular ways to transfer money to future generations is the annual gift exclusion, which allows you to give your children or other relatives up to $15,000 a year per person. Neither the person giving the gift or the person receiving it has to pay taxes on it.
12. Plan for long-term care
Long-term senior care can be terribly expensive — one year in a private room at an assisted living center costs more than $48,000, and the average cost at a nursing home is more than $100,000.
Long-term care insurance can help with the costs but itself can be costly. Most financial advisers recommend looking for a plan between the ages of 60 and 65. The premiums could double or more if you wait until you are 70. And unlike Medicare, if you have serious health issues, long-term care insurers may turn you down for coverage.
13. Lower your debt load
If you carry credit card debt, try to pay it off before you retire. The same goes for student loans and any outstanding medical bills. Another important debt you would want to lower significantly, perhaps even altogether, is your mortgage.
For example, if you plan to retire at 65 and have 15 years left on a 30-year fixed-rate mortgage, refinancing at 50 into a 15-year fixed-rate mortgage will raise your monthly payment a little, but your home will be yours free and clear when you retire. As mortgage rates have fallen during the coronavirus crisis, now might be a good time to consider refinancing.
14. Plan to keep you current car
As of 2019, the average age of a car on the road in America was 11.8 years. That is up from 6.9 years in 1980. Without question, the quality of cars and light trucks sold in America has improved significantly. Still, lots of people were buying cars last year when total sales hit 17 million. However, buying a new car usually means a car loan. Some of these stretch as long as seven years, locking people into multi-year obligations. That can be a major drag on income. If you have a car that is less than five years old, keep it in good shape and drive it five more years.
15. Plan to work a year or two longer
Jobs could become more and more difficult to find in the next several years. People about to retire may want to keep working in their job, if they have one. Even an extra year or two would allow an increase in savings. Also, some jobs have extremely valuable benefits — from health care to pensions. Companies often like to retain older workers because of their extensive training and experience that may date back decades.
Sponsored: Tips for Investing
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.