In the age of massive debt and uncontrollable spending urges, it’s incredibly important to understand financial responsibility even after you have retired. If you want to live comfortably throughout retirement, follow these guidelines to stay financially secure.
The first thing you should do is get your insurance plans in order. Figure out which Medicare supplement plans are best for you based on your existing health insurance coverage, and understand what kinds and what levels of life insurance you have. Term life insurance is cheaper, but doesn’t provide any financial benefit to you before you end up having to use it. Whole life insurance is more expensive, but it does, however, provide you with dividends throughout the lifetime of the policy which can be taken in cash or reinvested into the policy. Reinvesting your dividends is the best thing you could do, as that enables the power of compound interest. As the dividends are reinvested into the policy, the value of the policy grows, which then yields a bigger dividend at the next payout, and so on and so forth.
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Once insurance is taken care of, it’s time to get yourself out of debt. Interest rates can either make or break you, and if you are drowning in too much credit card debt the interest will definitely break you. Debt itself is not a bad thing, but not being able to control it certainly is. It’s important to pay down your debt as quickly as possible because the interest rates you are paying are typically far higher than any return you are likely to make on any normal investment. Even if the stock market yields an 8% return each year on average, and even if you did as well as the stock market did, your credit card interest rate is probably two to three times that. So make getting out of debt your next big investment.
When the other two pillars are finally under control, then you can start looking into different types of investments that might be right for you. Investing in the stock market, Real Estate, Bonds, commodities, etc. are all fantastic ways to invest your money. The more passive income you can generate for yourself, the better off you will be by keeping the money streaming in with little to no physical effort on your part. Don’t go to work for money, make your money work for you. You will be much happier that way.