Early financial planning can make for a stable retirement


For more than 40 million senior citizens living in America, planning for the future financially can be a daunting task. According to, the average household income for people over the age of 65 is about $37,000.

But living in retirement doesn't have to be scary, if you do some early planning.

"When you turn 50, you need to start putting together as retirement plan," certified financial planner Stephen Byrne of Gulfport said.

He said eliminating debt is one of the main things someone who is turning or has just turned 50 needs to address.

"When you turn 50, it's really time to do an assessment of are you going to be in a position to retire in 10 or 15 years," Byrne said. "But the number one thing you can do is start paying off your debts. You don't want to carry this debt with you when you retire."

Another way to make retirement easier is to create a "rainy day" fund.

"Before you hit retirement, you need to start putting money in an emergency fund and do not use that money as part of your regular monthly expenses," Byrne said. "This is money that is used only for emergencies, if you can. You're going to need some money in case of emergencies such as the roof blowing off or something. It's easy to live on what's in the account -- until something comes along."

Byrne said that five years before retirement is the "time to get serious."

"You need to be getting that debt paid off," he said. "Going into retirement with debt is a nightmare. The less debt you have, the more freedom you will have."

Living as if you have retired a few years before you retire, Byrne said, can also be beneficial in preparing for when the big day arrives.

"You need to create a retirement budget," Byrne said. "This will let you know what you can and can't live on. The simpler you make things financially, the better your retirement can be."

A 401(K), or, work-based retirement savings plan, is a common source of income many people have at the age of retirement.

Byrne said retirees should know what they want from their savings.

"You need to determine what your money needs to do for (you) so that (you) can maintain (your) lifestyle," he said. ""Most people don't stop to compute what return they need to maintain their lifestyles."