1. Pay down debt
No one should retire with debt -- and that includes real estate debt. If you're not already adding more money to your mortgage payments, you should be -- the sooner you can pay off your house, the better off you'll be. You should also have no credit card debt. In fact, pay that off first. When you retire, and your income falls, the last thing you want to be doing is paying off a high-interest credit card.
2. Keep saving
You're going to need some money if you want to retire well. The only way that can happen is if you keep putting money in your RRSPs, TFSAs and other investments. Consider contributing the same dollar figure each week or month -- instead of a lump sum at the end of the year -- so you'll constantly be saving.
3. Write a will
If you don't have a will, consider getting one. A will protects your assets and can help keep your children and other family members financially secure if something were to go wrong. If you don't have one, the government might step in and divide your assets according to the law. That could leave kids -- or, say, the charity you wanted to leave some of your estate to -- out of their cut.
4. Reduce your investment fees
It's hard to make money when you're paying hefty fund fees. New, cheaper investment options come out every year, so do some research and move your dough into funds with lower management costs. Exchange-traded funds -- funds that track the performance of an index like the S&P/TSX Composite Index -- typically offer the lowest fees.
5. Buy insurance
Maybe you never got around to buying insurance. Or perhaps you bought 20-year term insurance two decades ago and didn't realize the term was up. Either way, you need to review your insurance needs and decide whether you should top up or buy into a new plan.
While insurance gives your family money if something terrible happens, it can also be a strategic way to pay estate taxes. So, even if you have life insurance, you might want to buy more to take the burden of covering estate fees off your heirs.
Of course, there are other resolutions you can add to the list -- like ditching the expensive house and downsizing to a condo -- but tackling these five tips will be a good way to start off the New Year.
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