Paying off debt now reduces the amount of cash you will need to spend in retirement. Downsizing your home is a great way to help reduce debt when preparing for retirement. If you’ve lived at least two of the past five years at your primary residence, you may be entitled to a capital gains tax break on the profit—up to $250,000 if you are single or $500,000 for a married couple.
It’s time to start thinking about how much you will need to spend on groceries, health care, travel, and other items and services once you’ve begun your retirement. Consider ways to reduce expenses or increase your sources of income if your projected retirement income sources will not be sufficient. Talk to a customer service representative from Advisory Planning Services for help with your portfolio and goals.
Until now, you’ve probably kept the bulk of your retirement assets in equities. As your time to retirement shortens, you should consider moving some assets into more stable, income-producing investments like bonds or annuities. At the same time, consider how long you will need your assets to continue in retirement. Analyzing the time before your funds are needed and the time you’ll need them for can help you determine the right allocation for your goals.
Evaluate strategies to reduce estate taxes or transfer assets to the beneficiaries you want to receive them. For more information, consult with an estate specialist or visit our estate planning center.
You can also receive or download a copy of the T. Rowe Price Estate Planning Guide, which introduces you to important estate planning concepts and discusses potential strategies that may help you achieve estate planning goals.