From health conditions to financial insecurity, we face a new set of uncertainties that can enter the picture anytime as we get closer to retirement age.
The truth is, it doesn’t get any easier as we reach the golden age, even more so if we fail to plan early and learn how to protect and grow the assets we have.
As we age, it’s imperative to learn from our financial mistakes and shift our financial practices to prepare for the transition from working and saving to living off our nest egg.
Whether you’re in your early 40s or late 50s, these asset management tips can help you live a comfortable and worry-free retirement. Read on to find out the steps that you can follow as early as now!
1. Review your insurance coverage
Ask yourself these questions: “Do I have adequate insurance coverage now and for when I retire?” and “Are my premiums up to date?”
While these may sound like no-brainer questions, premiums and coverage are always a huge concern for insurance policyholders.
Insurance premiums get more expensive as we get older, which makes them more difficult to settle. The rate we’re paying in our 40s and 50s is likely higher than what we’re paying in our 20s.
However, failing to pay our premiums may compromise our insurance coverage, and without proper coverage, our assets are at risk.
It’d be gut-wrenching to find out that your insurance won’t cover your hospitalisation bills just because you had lapses in paying premiums, which is what happens most of the time.
2. Shift towards more conservative investments
Another asset management tip that helps us build a comfortable and stable retirement is looking for conservative investment options.
If you’re an investor yourself, you’d know that there’s a lot of risks that come with investing, with no guarantee that your money will grow.
As a general rule of thumb, younger people have a higher risk tolerance because of the privilege of time to recover from financial losses.
As we get older, shifting to conservative investments protects our assets in the long run. Sure, high-risk investments may give us a lot of profit, but there's a higher chance of losing money too!
Simply put, you can’t afford to lose huge amounts of money in your 50s! This is why opting for a safer portfolio will enable you to safeguard your assets.
3. Watch out for fraudulent activities
Let’s be honest, older people are more susceptible to online financial scams due to the ever-changing digital landscape.
It’s important to be cautious of every text, phone call, or email we receive as we never know when hackers are going to attack.
You may have heard of countless stories of older people’s bank accounts getting depleted after falling victim to phishing scams.
Scammers are just getting smarter and know exactly how to manipulate people, so it doesn’t hurt to be extra careful with our transactions and ask the relevant companies when in doubt!
4. Look for passive income streams
While it’s ideal to start thinking about protecting your wealth years ahead into retirement, this doesn’t always come easy for everyone.
As surviving on a single stream of income gets harder by the day, looking for other sources of income can help us save more money for retirement!
For those who don’t have the spare time for freelance jobs, investing may be the easiest way to earn a passive income. The beauty of it is that even after retiring, you/ll still have money coming your way.
Other sources of passive income worth exploring are rental properties, affiliate marketing, and peer-to-peer lending.
5. Automate your finances
The best financial planning tip that applies to everyone regardless of age and goals is automating finances.
It gets harder managing our expenses as we get older as our physical and cognitive abilities decline. As early as now, you can try building a habit of automating your income and expenses in a single bank account for convenience.
For example, monthly dues like rent, insurance, and utilities should be automatically deducted from our account on set days each month.
Automating our finances will make it easier to track the money that goes into and out of our bank account.
6. Check your estate planning documents
Contrary to popular belief, estate planning isn’t exclusive to the wealthy!
Preparing estate planning documents is important to make sure that your assets will be distributed according to your wishes when you pass away.
However, how exactly does it protect your assets? It protects your assets by preventing them from ending up in probate court, which can’t guarantee that everything will be distributed to your loved ones accordingly.
With proper estate planning, all the assets you worked hard for over the years will end up in the hands of your loved ones.
Building a secure and comfortable retirement
Growing older not only makes us more prone to various health conditions but also financial insecurity. Without employment to give us a steady income, we’re left to rely on our nest egg to get us through retirement.
The problem is, our retirement funds aren’t going to last forever, so if we want a worry-free retirement we have to be proactive in protecting and growing our assets.
If you want to talk to an expert about financial planning and wealth management, feel free to send us a message! We can connect you with experienced financial advisors who can help you achieve your dream retirement.