There are a lot of things to think about when it comes to preparing for retirement.
There is no shortage of checklists and the subjects for reflection are as diverse as they are varied.
We are going to discuss a very interesting part of the reflection, how do you prepare for retirement from a financial point of view?
1.Plan your retirement date
It can be difficult but you have to think about when to retire. This makes it possible to optimize taxation on both income and wealth. Indeed, several measures can be considered before the first pension payments take place.
For example, the advance of the AHV pension or its deferral. Choice between a pension or capital from your pension fund (all or part of it, with or without installments). Pre-retirement or unemployment or a combination of the 2 in case of dismissal in the last years of your career. Solutions that provide tax-efficient annuities, reduction of the tax burden on wealth or even estate preparation.
2.Prepare your budget
Revenues and expenses will no longer be at all the same as the period of activity. It is therefore necessary to redo a budget in order not to find yourself helpless after retirement. This is very important, as it is no longer a period of capitalization, but a consumption of the capital saved. In addition, it is only rarely possible to obtain a loan or microcredit to make up for a lack of liquidity, once retirement age has been reached.
This preparation allows decisions to be made on important points of the budget such as rent, insurance or even leisure.
3.Have the best net income
In the end, the objective is to have the best possible standard of living in retirement. This results in the highest possible net income (after-tax income).
It is important to consider all options and to calculate the best way to consume and/or grow your assets. Frequently, a mixture of several solutions is optimal in order to minimize income and wealth taxes. It is important to also take into account the inheritance aspect in all considerations.
The portion of funding paid up to the day of retirement plays a major role in the estimates. The use of tax tools such as the 3th Pillar A is essential for good retirement planning.
4.Managing your debts
Managing your debts is essential for a peaceful retirement. Indeed, the conditions for granting or renewing are much more drastic than during working life.
It is better to keep a low debt ratio in order to be able to assume the debt, knowing that our income will practically no longer increase.
An analysis and calculations must be undertaken in order to secure one's assets.
5.Preparing for the management of your wealth over time and your succession
Managing your assets at retirement age is no easy task. Capital is consumed gradually and the investments made with one's wealth can change the standard of living in retirement.
The decisions made in investments and the forms of capital consumption are therefore crucial in the financial management of our assets.
The consequences in terms of returns, taxation or even inheritance can have a decisive impact on the rest of our lives or that of our heirs.
Looking to prepare for retirement? Contact us or compare the 3rd pillar directly online via our platforme.
