Pay Off Debts First, Then Be Aggressive In Saving
“For the vast majority of people, their income will decline during retirement,” observed Jennifer Luzzatto, owner of Summit Financial Planning Inc. “One of the steps that people should take before they retire is to aggressively reduce their debts. Paying off consumer debt such as credit cards can free up hundreds of dollars per month in funds as well as save potentially thousands of dollars in interest expense.”
Diversify Your Bond Portfolio
Most investors can best buy the bond portion of their portfolios by purchasing bond mutual funds. Because the best prices on bonds are usually in very large increments (think $1,000,000 per purchase), individuals benefit from being able to participate in a pool of professionally managed funds invested in the bond market. (For information on individual bonds, see Strategy #27.) Your approach to diversifying your bond portfolio depends upon whether you’re in the accumulation phase or the retirement phase of your life.