People can avoid financial difficulties. It takes planning and knowing that they need to be in good financial standing after they have stopped working. The main things they will want to do are remain free of debt and always contribute to their retirement accounts. If they avoid the following six things, they will be on the road to a healthy financial future.
- Conservative Investing
After people have retired, they tend to follow the advice that states they should not be heavily invested in the stock market. Retirees are undoubtedly thinking that they need to take care of the money they have worked hard to earn over their lives so that it will continue to provide them with an income throughout their retirement. Although this is a concern, investing in bonds more than they invest in stocks may not be the best plan. Retirees only need to invest as much in stocks as they can comfortably tolerate.
- Early Retirement
If people retire at too early an age, they hurt themselves in at least two ways. The first is that they will no longer be working at a time when they could have received the highest salary of their careers. The second is that they will receive less from their pensions than they could have gotten if they continued to work until retirement age. It would benefit the finances immensely of those who continue working as long as they can if they remain in their jobs as long as they are in good health.
If people believe that they must divorce their spouses, it will be to their advantage to have a friendly divorce. The best plan is to avoid the lawyers and the trials in favor of mediators that can reduce the costs by 75 percent. The reason mediation is much less expensive is because as people fight each other in court with lawyers, these cases tend to take a long time to be resolved. As people agree to split their assets amicably and refrain from fighting each over custody of the children, they spend less time as well as less money engaging in the divorce process.
- Living an Unhealthy Lifestyle
Purchasing a life insurance policy is a great way for people to keep their families from experiencing any financial hardship after they lose their main breadwinners. If these people cannot qualify for a policy that they can afford, the will either not be able to purchase life insurance or they will pay very high premiums. Before they find that this will be the case for them, they can begin to lead a much healthier lifestyle.Part of purchasing a life insurance policy is taking a physical examination. If people know that they will have, for example, a high cholesterol reading, they can work with their doctors to lower it. The better their lab results look to the insurance company’s underwriters, the lower their insurance premiums will be.
- Not Making Sufficient Contributions to Their Retirement Funds
People have a wonderful opportunity to begin making contributions to their retirement accounts when they first start working. The longer they wait to do this, the less time they will have to build enough money to retire in comfort for as long as they will need the money.
- Not Purchasing Enough Insurance on Their Houses
People can insure their houses plus the contents they store on the property. As time goes by, the value of the house may increase. At the same time, the belongings people also may have insured with the policy will depreciate in value. Those who do not purchase a policy that adjusts as the value of the house increases will not receive the correct amount of money in the event that the house is destroyed and needs to be rebuilt. If their policies do not adjust for depreciation, they will pay more for their policies than they need to after the value of their belongings has decreased. Most insurance companies offer multi-discounts for combining your auto insurance policy with your home insurance policy. Go online to Kanetix.ca to get the cheapest auto insurance quote from a reputable insurance company. You could be saving hundreds of dollars every year.
- Maintaining a Balance on a Credit Card
If people maintain a balance on a credit card that takes up more than 30 percent of their available credit, their credit scores will begin to suffer. Credit scores are based in part on how much of the available credit is being used. As they come close to using 50 percent of their credit, people begin to think that these borrowers are coming close to overextending themselves. They can avoid this by only charging between 10 and 30 percent of their available credit and paying the bill in full every month.
This article was written by a Kanetix contributing writer. Since 1999, Kanetix Ltd. has helped millions of Canadians save money on their insurance.