How to stay on top of your finances as retirement approaches

Do you feel like your retirement is too close? You're not alone. Retirement can be a scary prospect, especially if it's coming up soon.

Everyone will tell you how important it is to make sure that your finances are in order before retirement.

But, in reality, it can be quite difficult to stay on top of things when you bore too many financial responsibilities during your most productive years.

However, you can secure your financial future through discipline and commitment.

Visualize your ideal post-retirement lifestyle

You can't create an effective retirement finance plan without a vision of the lifestyle you intend to live then. Same way you can't fund a project whose plan you do not know.

Will you retire in the same house you live in currently? Or will you need to buy, build, or rent elsewhere? What will you be doing now that you will be out of job and free?

The answers to these questions can vary the amount you need significantly. Once you have visualized your dream retirement, estimate what it would cost to actualize it. Don't forget to include inflation in your calculations.

Save now, don't wait till the last minute

Now that you have an idea of the future you want, start saving. The earlier, the better. It will definitely be difficult to save during your first jobs after college. Low pay, student loans, and buying new items as you start life will drain most of your pay.

If you wait until you're earning enough to start saving, that time will never come. When you get better pay, you will undoubtedly upgrade your life and start spending more.

Start saving even when you earn peanuts. This will help you become disciplined and gain momentum that will help you keep saving even when you start earning more.

Schedule monthly or quarterly assessments to review where you are financially and make adjustments if needed.

And if you have not been saving and are nearing retirement, you are doomed. Start saving now, but you will have to save a huge chunk of your pay-check.

Set up an emergency fund

Even as a retiree, life could still send unpleasant surprises your way. it could be a broken car, faulty plumbing, or a medical emergency not covered by your insurance. In extreme cases, your flow of income from your investments may be interrupted for a long time.

To account for such possibilities make sure your emergency fund can support you for a minimum of six months based on the retirement lifestyle you envision. If you can, go for nine or 12 months.

Don't use up this money for your current emergencies unless in dire situations. It should be strictly for post-retirement use.

Start paying for your insurance plan

If your pension is not enough for retirement, maintaining health insurance before retirement is essential. After retirement, you will be in more need of health insurance than ever before.

Unless you have really big investments, your income will go down just when you are most vulnerable. The chances of being diagnosed with illnesses such as diabetes, high-blood pressure, and heart illnesses will spike significantly.

Even what would have been minor injuries in your younger years can be long-term problems for older people.

Fortunately, you have time. Shop around for an insurance plan that caters for older people and start paying right away. Many insurance companies promise great rates for long-term customers.

Keep track of and update your investment portfolio regularly

As you approach retirement, the money in your investment portfolio will be most of what you have. It's important to keep an eye on and update this regularly so that things don't get out-of-hand.

An easy way is by setting up a prearranged plan with every one of your providers (banks, insurance companies) and have them send you statements once or twice a year.

Steer clear of unnecessary investments and high-risk ventures at this point in your life. You may want to invest more conservatively, especially if retirement is not far off.

Present knowledge is the blueprint for the future

Do you need to buy or build? What will you be doing now that you are out of work and free?  These questions may seem basic but the answers can vary your financial plan substantially. 

True, you can't anticipate everything. But with proper research, you will always have enough information to make a reasonable plan. Treat the task of creating the right financial resources for retirement not just as a privilege, but as a serious responsibility too.