Retiring with financial security does not start at age 62. As retirement age approaches, it is time to ask yourself a very important question, “Do I have the money management skills to retire financially secure?” In order to answer this question, it is best to evaluate your money tracking, saving and management skills.
Money tracking refers to the ability to know exactly where your money comes from and where your money is going. This skill is the foundation of retiring with financial security. For at least ten years before hitting the age of retirement, careful accounting techniques should be followed. These techniques can be managed by either you or a hired firm. Within a year of tracking the positives and negatives to your bank account, you will have a near precise estimation of how much money you will be able to retire with.
Money saving goes hand in hand with money tracking. When tracking expenses and incomes, eventually lulls and spikes will appear. These are normal in most instances and relate to special family vacations or holidays. What will also appear on the books, is frivolous spending. This spending for vices and luxuries will deplete the money that will keep you within the realm of retiring with financial security. While account techniques should be started no later than 10 years before retirement, the optimal time frame is closer to 25 years in order to cap any extra spending and reverse the damage on the retirement savings.
Today is the day to start saving for retirement. Despite the huge losses on Wall Street, the aging population will have to retire at some point and if there are no savings and no social security to fall back on, where will these elders go when the money runs out?