Golden time to strengthen financial foundation
Retirement is not simply stopping work but a major turning point in life. According to many experts, the last 4 years before leaving the labor market are the crucial time for everyone to comprehensively review their finances, health and life plan, in order to ensure stability for the next 20-30 years.
One of the most important things is to control spending and clearly identify life needs after retirement. Classifying essential and non-essential expenses helps build a realistic financial plan, avoiding falling into a state of income shortage.
In parallel, experts recommend prioritizing the settlement of high-interest debts, especially credit debts. This is considered a major "burden" when entering a stage where there is no longer a stable source of income.
In addition, the establishment of an emergency reserve fund with a minimum of 6 - 9 months of living expenses is necessary. This fund acts as a financial "cushion", helping retirees avoid having to sell assets when the market fluctuates.
According to Mr. Michael Kitces - financial planning expert at Pinnacle Advisory Group (USA), "4-5 years before retirement is the most important time to reduce financial risks. Restructuring the investment portfolio to more stable assets will help protect long-term income.
The shift of investment portfolios from risky assets to stable cash flow channels such as bonds or dividends is also encouraged to balance between growth and safety.
Preparing for health, housing and post-retirement lifestyle
Not only financially, life-related factors also need to be prepared early. Medical expenses are often the largest expense in old age, so reviewing insurance and planning long-term health care is something that cannot be ignored.
In addition, house repair items such as roofs and electrical and plumbing systems should be completed when there is still a stable income to avoid financial pressure later.
An increasingly popular trend is to cut fixed costs, such as reducing living space or optimizing unnecessary services. This makes the pension budget more flexible and sustainable.
In addition to material factors, mental preparation also plays an important role. "Approving" retirement life in a short time helps each person better visualize the new rhythm of life, thereby adjusting the plan appropriately.
Experts also recommend completing personal goals such as traveling early while still healthy and financially stable, instead of waiting until retirement.
Finally, consulting with financial experts and updating inheritance plans and wills will help minimize legal risks and ensure the rights of the family.
Preparing for retirement is not a matter of a day or two. The more proactive you are early, the more opportunities each person has to enjoy a peaceful, independent and fulfilling old age.
