This week, I’m talking about your one year from retirement checklist. When you’re one year out from retirement, there are several things you’ll want to do to help ensure that both you and your finances are ready for you to take the leap into retirement. 

Today, I’m talking about why you should prioritize reducing your expenses over saving more as you get closer to retirement. This tip also applies if you are few years from retirement - not just in your last year. 

In most cases, you’re going to get substantially more benefit by reducing your expenses over saving more in the last years before retirement. 

Maximizing your savings is of utmost importance, especially in your first 10-20 working years, but the impact of saving more wanes as retirement approaches, mostly because your savings just doesn't have as much time to grow and multiply like it did when you were 25, 35, or even 45 years old. 

Instead, you’ll want to focus on knocking out debts and reducing expenses. This means paying off any debts you can before retirement, including your mortgage. Or if that’s not possible, look into a re-fi that could reduce your monthly payments or shorten the life of your mortgage. 

You’ll also want to look at all your other expenses. Are you still paying for your 25 year old son’s cell phone? What about the gym membership you haven’t used since Covid and probably won’t go back to. Maybe you can downsize to 1 car instead of 2. Wherever you can reduce debts and trim expenses before you retire - do it. You need to cut the fat in order to give your money the best chance of sustaining you and your lifestyle in retirement. 

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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