![]() ![]() After age 50, you also want to reap the greatest possible return from your investments, as these may be your highest income-earning years and the time when you have the most potential to sock away money.Īhead of retirement, the goal is to start adjusting your investment risk a bit, while maintaining the opportunity for steady growth in the upcoming years. ![]() If you have investments, review them now - or have a money manager do it - to make sure you have a truly diversified portfolio. So make sure you’re not investing all of your savings in just a single account or investment type. That’s critical, because the younger you are when you buy permanent insurance, the cheaper it is.Īt this phase of your life, you don’t want financial mistakes - and particularly investment blunders - to derail your retirement game plan. According to Simbro, this means your term policy allows you to change the policy to permanent insurance “without going through underwriting again.” That means no new health exam. One unique benefit of a term life policy that is convertible to permanent insurance is that it lets you retain your current health status through the life of the policy. “Be aware that if you’re depleting your cash value, and it’s not considered a loan, that’s going to be a taxable event,” says certified estate planner Jean Dorrell. You can borrow against the cash value of the policy’s death benefit, or just elect to take money from the policy, and lessen the death benefit payout. Whole life or permanent insurance policies, while significantly more expensive than term insurance, offer the flexibility of tapping into the policy’s cash value while you’re still alive. One consideration could be converting your term policy into permanent life insurance. If you do choose to refinance, “You don't want to refinance into a term longer than your current mortgage,” Jacobson says. If you can’t eliminate your mortgage altogether, consider slashing your housing costs by refinancing your home loan at a lower interest rate. Jacobson says that if you can enter retirement without a big mortgage payment, you can most likely live on a lot less. The higher the interest rate, the stronger the argument for paying the debt off sooner.” “There certainly can be a big incentive to keep that nice mortgage interest deduction going. “I've always said not to let the tax tail wag the dog,” says Aric Jacobson, a certified financial planner in the San Diego, Calif., area. The issue of the tax benefits associated with a mortgage usually comes up when people are faced with the decision of paying that loan off ahead of schedule. ![]() Most retirees who own their homes free and clear will tell you that living without a mortgage is financially liberating. This includes any car loans, mortgages, large credit card balances and personal loans that you’ve been carrying around for a while. Calculate your current debt load and start paying off larger debts as soon as you can. You don’t want to be dealing with mounds of debt as you work those last few years before retiring. ![]()
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