Retirement Income Planning Tips For 2011

The best retirement income planning tips are usually not that complicated

. Many of these methods to help you stretch your purchasing power and save more money towards a more substantial nest egg may be accomplished with tools you already have, and routines that are not that hard to implement. Here are some ways to ensure better chances at retirement security in the New Year:

Rethink Your Budget

Even if you think that the way you budget your money is at its best, you can probably manage your resources better. Improving your money management helps you find things you can cut back on, as well as optimize how you save money for immediate expenses and costs you can incur in the future.

Restructuring your budget or just starting to establish a monthly budget? You can start by documenting all expenses over the span of a couple of months. After you have accumulated the necessary information, you can build (or restructure) a practical spending plan per month. After you have documented expenses over two months and compared these to your spending plan, list down all expenses that happen after. At the end of that month, compare how much you have spent versus your new budget plan, and see where you complied and where you were unable to. If you shelled out less than you expected, place any surplus cash into a savings account (preferably a high-yield one), or funnel it towards debt payments.

Prioritize and Eliminate Debt

Before paying down debt, you will need to prioritize which ones to pay first; preferably placing high-interest debt at the forefront. Many households will get the best results in terms of eliminating debt by paying down credit card debts first, as these are typically the most expensive debt people have. Placing some of your savings into credit card debt payment comes with what you could consider as risk-free and double-digit returns, as you lower your outstanding balance, as well as decrease the associated charges for interest. The move to prioritize and eliminate debt is will be beneficial to your funds now and for the foreseeable future where rates for credit cards are expected to shoot up in the coming years.

When you are prioritizing what debts you should pay first, place low-interest debts at the back burner. For debts due to multiple credit cards, pay off the ones with the highest rates first, and then pay off the balance for the card with the second-highest rate, the third-highest, and so on. This is one of the easiest ways to strengthen your retirement income planning and your future nest egg.

by: Katherine Smith

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