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Managing your finances now and looking ahead to financial freedom during retirement is a big load.
Thats why we talked to an expert on the subject.
He has been in the financial industry for over 20 years.
Here are his 10 tips for balancing family, finances and freedom in your retirement.
More than one-third of employees in the private sector dont have a retirement plan.
This is where settingclear and realistic retirement goalsbecomes so powerful, McFall explained.
To understand what it will take to fund them and where you currently stand, he said.
Start by looking at your income, expenses, assets and liabilities.
How much does your lifestyle cost today?
And what might change in retirement?
These questions are critical to move forward with a plan.
Then think about what you want, like holidays, supporting your children, car upgrades and entertainment.
Its also incredibly tax-effective, which means more of your money stays with you in retirement, McFall explained.
Understanding how to use them can significantly boost your retirement nest egg, he added.
Also, knowing when it’s possible for you to access your super is just as important.
Figuring out these defined-contribution plans and how they will benefit you will pay off tremendously in your retirement years.
Establish Diverse Income Streams
One big problem for many is that they have a single income stream.
When that dries up, youre in trouble.
Contributing to retirement plans is a key pillar, but its not the only option.
As you approach retirement years, its time to start thinking outside of the box.
Diversifying your investments can help create multiple sources of income, McFall explained.
The right mix of income streams will ensure you enjoyfreedom and familywith financial independence to boot.
Have a Clear Tax Structuring Plan
But what about taxes?
McFall covers us there, too.
Tax structuring simply refers to how your assets are owned and what legal structure they sit in.
For instance, are your investments in your name?
Shared with your partner?
Held through a family trust, a company or inside your super?
Each of these setups hasdifferent tax rules, advantage and disadvantages.
Especially once you hit the retirement phase, where earnings can even become tax-free, McFall added.
Trusts give you the flexibility to share income between family members.
Companies can help you lock in afixed tax rate.
And holding assets jointly with your partner might work well if one of you is on alower tax rate.
You want to think now about how to structure your taxes during retirement best.
Pay Off Debt the Smart Way
Youre not just saving and cutting taxes, however.
You also want to get clear ofall the debtsyou can, without sacrificing your wealth.
Instead of putting every spare dollar into debt, consider combining repayments withsmart investment and tax strategies.
For example, selling an asset to pay off debt might be a good move, McFall explained.
But is it the right time?
If yes, it could reduce your capital gain tax.
Likewise, consider using an income-generating investment to help you cover repayments without eating into your savings.
Also, dont underestimate the power of debt restructuring.Refinancing or consolidating debtcan reduce your interest costs.
And if you havent already set up a proper repayment plan, now is the time.
Focus on clearing high-interest debt first, but also think about whether any of your debt is tax-deductible.
That can make a real difference to what theyre actually costing you in the long run.
The goal isnt just to be debt-free.
Its to be in control of your money, including your debt.
You want to head into your retirement withmore freedom and flexibility.
Consider a Downsizing Strategy
If youve been living large, you might want to reevaluate that lifestyle.
While your home holds sentimental value, it may no longer suit your future plans or budget.
Old age care might not be the first thing when planning for retirement, but it really should be.
The costs can add up fast if you need support at home or aresidential care facility, McFall said.
So, planning early can help you avoid unexpected stress.
Rather than leaving it to chance, take the time now to understand whats coming, McFall said.
That way, youll be in a better position to make smart decisions that suit your needs and lifestyle.
Manage Risk With Smart Insurance Planning
Youre better off havingtoo much insuranceas you age than not enough.
Retirement planning isnt just about growing your money and ensuring its protected.
Lets be real: things dont always go to plan, McFall explained.
Asudden health issueor an accident can disrupt your life in ways you didnt see coming.
Thats why having the right insurance in place is so important.
Thats where speaking with an experienced financial advisor can make a difference.
At the same time, no two retirements are the same.
So, advice thats right for someone else may not be the best fit for you, he added.
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