For those employed both in private and public sectors, retirement is an obvious reality that cannot be dodged. Its is therefore important that anyone who wishes to have a financially stable retirement to know how to achieve this.
According to Manyara Kiragu, a personal finance professional, these are the money mistakes you must fix by your fiftys.
Having high consumer debt – dealing with lingering consumer debt is crucial especial if you are being weighed down by high interest debt like credit card balances and mobile loans. These kinds of debts can hinder your ability to save for retirement and attain financial freedom. Its is therefore important to take proactive steps in paying any consumer debt. Debt snowball strategy can help speed up debt repayment. Debt snowball method is a method of paying debt from the smallest to the largest.
Avoid dependence on earned income – your future financial stability is uncertain if you are still solely dependent on your income and you have no passive income sources. Depending solely on your monthly income lives you vulnerable to economic downturns, job lose or unexpected health issues that may render you unable to work. Diversifying sources of income helps to mitigate these risks.
Failing to have insurance – while young people in their twenties or thirties may not see it important to secure either a health or retirement insurance, at fifty, it’s a necessity. As you age, guarding yourself against health emergencies become increasingly important. With health insurable for example, one can handle critical health emergencies without overwhelming cost as medical expenses have the potential of exhausting your savings and jeopardize your financial security. Insurances will also help protect your assets.
Failure to have a will – a will, will outline your preferences on how you’d want your will to be distributed when you pass one. Without one your estate could be distributed according to the law which could conflict your wishes. You children may also want to mitigate through court proceeding which can deplete the wealth you left behind.
