The arrival of spring triggers a sense of optimism, a fresh start and a time to sweep out the cobwebs. As you spring clean your house, don't forget about your finances. This is the perfect time to take stock, review and set new financial goals to keep you on the path to retirement.
Too many people do not take ownership of their financial future, says Andrew Rafal, president of Bayntree Wealth Advisors in Scottsdale, Arizona.
"A financial spring cleaning starts with organizing what you have – assets and liabilities, reviewing your estate plan, understanding your insurance policies, creating and modifying your budget and shredding old documents," he says.
There are several areas of your personal finances that should be reviewed periodically, says Neil Krishnaswamy, certified financial planner at Exencial Wealth Advisors in Frisco, Texas.
"These don't all have to be done at one time, but you may want to make sure none of these areas go too long without being reviewed and potentially cleaned up," Krishnaswamy says.
Here are 11 tips to get you started.
Examine your debt. There is "good" and "bad" debt. Generally, high-interest credit card debt falls into the bad category, while student loans and home mortgages fall into the good category as they have the potential to help you increase your long-term level of financial security.
Take an active role in understanding your debt and how it could offset your long-term plan of financial independence, Rafal says.
"Eliminate high-interest debt as soon as possible, such as credit cards," Krishnaswamy says. "It may be less urgent to pay down other sources of debt such as home mortgage with a low, fixed interest rate."
Many financial experts recommend the goal of being debt-free by retirement. However, debt can be used intelligently in retirement, Krishnaswamy says.
"Examine your overall debt ratio, which can be as simple as looking at your total liabilities divided by your total assets," he says. "There's no magic number, but if you can keep your debt ratio at 25 percent or under, it may be a very reasonable and manageable load to carry, even in retirement."
RELATED: Check out the best cities to stretch your retirement nest egg:
Best cities for stretching your retirement nest egg
Best cities for stretching your retirement nest egg
25. Orlando, Fla.
Annual healthcare services: $6,126.37
Annual taxes: $3,651.94
Annual utilities: $3,886.59
Annual housing: $8,780.50
Overall cost of living: $46,696.15
Located in one of the best states to retire in the U.S., Orlando offers a potential benefit for retirees: Your kids and grandchildren might visit you more often so they can go to Walt Disney World, Universal Studios Florida and SeaWorld Orlando. When your kids are looking to knock out two birds with one stone — take their children on vacation and visit you at the same time — Orlando could be the perfect lure.
(bobbyuzda via Getty Images)
24. Charlotte, N.C.
Annual healthcare services: $6,031.32
Annual taxes: $3,595.27
Annual utilities: $3,826.29
Annual housing: $8,644.26
Overall cost of living: $45,971.63
You can make your retirement savings last in Charlotte, and you could also earn some money back on your home’s value if you decide to move again. Zillow's data shows home values have been on an upward trend over the last couple of years and predicts they will rise about 4 percent in the coming year.
If you want to move to Minnesota, consider St. Paul over other popular cities — such as Minneapolis. Not only is St. Paul less expensive than Minneapolis, according to Sperling's Best Places, but the crime rate is also lower. St. Paul also shines in terms of healthcare, having 279 physicians per 100,000 population compared to the U.S. average of 210.
22. Louisville, Ky.
Annual healthcare services: $5,954.81
Annual taxes: $3,549.67
Annual utilities: $3,777.75
Annual housing: $8,534.61
Overall cost of living: $45,388.48
Cost of living in Louisville is low compared to the U.S. average, especially when it comes to housing, according to Sperling's. And, there are 335 physicians per 100,000 population.
For retirees trying to live life on a budget, cost of living in Indianapolis is lower than the national average. To save on housing, neighborhoods outside of the I-465 loop tend to offer a balanced combination of low-cost living and lower crime rates, reports Movoto.
Annual healthcare services: $5,942.64
Annual taxes: $3,542.41
Annual utilities: $3,770.03
Annual housing: $8,517.17
Overall cost of living: $45,295.70
The population of seniors has grown considerably — 20.3 percent — in Atlanta in recent years, reports Forbes. And, it's one of the best cities in the country for a healthy and affordable retirement, offering a satisfying senior social life, access to healthcare and more, according to Sperling’s.
Annual healthcare services: $5,922.93
Annual taxes: $3,530.66
Annual utilities: $3,757.53
Annual housing: $8,488.92
Overall cost of living: $45,145.50
Houston is a booming metropolis and a good choice for making your retirement savings last. In fact, it's one of the 50 cheapest places to retire. Health costs are cheaper in Houston than the U.S. overall, according to Sperling's. The city also provides easy access to top medical facilities, including the Texas Medical Center — the world’s largest medical complex.
18. Tampa, Fla.
Annual healthcare services: $5,882.36
Annual taxes: $3,506.48
Annual utilities: $3,731.79
Annual housing: $8,430.77
Overall cost of living: $44,836.25
Tampa boasts affordable rent and cost of living expenses, including groceries, according to Numbeo data. Many suburbs around Tampa have great retiree-friendly amenities such as golf courses, libraries, volunteer activities and more, reports Movoto. And with home values on an upward trend, it could be one of the best cities to own investment property.
17. Memphis, Tenn.
Annual healthcare services: $5,838.89
Annual taxes: $3,480.57
Annual utilities: $3,704.21
Annual housing: $8,368.47
Overall cost of living: $44,504.92
Memphis is affordable, making it a great place to stretch your retirement savings. The cost of living is more than 25 percent lower than the nation's average, according to Sperling's. On a broader level, retirees will appreciate Tennessee’s total tax burden — it's one of the best states for taxes.
16. Newark, N.J.
Annual healthcare services: $5,835.41
Annual taxes: $3,478.49
Annual utilities: $3,702
Annual housing: $8,363.49
Overall cost of living: $44,478.41
Newark’s housing market could help you grow your nest egg — if you're looking to make a good investment in real estate. Home values rose by nearly 20 percent over the last year, and Zillow forecasts they will continue to rise within the next year.
15. Columbus, Ohio
Annual healthcare services: $5,820.34
Annual taxes: $3,469.51
Annual utilities: $3,692.44
Annual housing: $8,341.89
Overall cost of living: $44,363.55
Fortunately for retirees, Columbus' cost of living is lower than the U.S. average. And a little further outside the city, retirees can find affordable suburbs with high proportions of residents age 65 and up, such as Lithopolis and Canal Winchester, reports Movoto.
14. Nashville, Tenn.
Annual healthcare services: $5,808.17
Annual taxes: $3,462.26
Annual utilities: $3,684.72
Annual housing: $8,324.44
Overall cost of living: $44,270.77
If you're thinking about retiring near Nashville, consider Ridgetop, Hendersonville or Oak Hill — all three suburbs ranked among Niche's top 20 places to retire in Tennessee.
13. Bakersfield, Calif.
Annual healthcare services: $5,796
Annual taxes: $3,455
Annual utilities: $3,677
Annual housing: $8,307
Overall cost of living: $44,178.00
If you want to escape the hustle and bustle of big cities like San Francisco and Los Angeles, Bakersfield might offer refuge. Not only will your $100,000 go far in the first couple years of retirement, but another GOBankingRates.com study found it's the No. 2 city where your paycheck will stretch the furthest.
Like other cities on this list, Phoenix is experiencing a marked increase in the population of seniors, reports Forbes. Other nearby areas you might want to consider for more senior-friendly amenities — such as restaurants, retirement homes and recreation centers — include Litchfield Park, Sun City and Florence city, reports Movoto.
11. Austin, Texas
Annual healthcare services: $5,752.53
Annual taxes: $3,429.09
Annual utilities: $3,649.42
Annual housing: $8,244.70
Overall cost of living: $43,846.67
Austin saw a substantial growth in its population of senior citizens from 2010 to 2014, reports Forbes. With minimal unemployment and major job growth projected for the future, the city offers many opportunities for retirees who might want to re-enter the workforce.
Although Dallas is one of the top cities experiencing skyrocketing home prices, it's still an affordable place for retirees looking to stretch their retirement savings. The cost of living is still lower than the U.S. average, and Sperling's estimates future job growth over the next 10 years will be more than 42 percent.
9. Sioux Falls, S.D.
Annual healthcare services: $5,710.80
Annual taxes: $3,404.21
Annual utilities: $3,622.95
Annual housing: $8,184.89
Overall cost of living: $43,528.58
Your nest egg can go further in Sioux Falls. Plus, the city offers work opportunities for retirees — more than a third of people age 60 and older are employed in the city, reported U.S. News.
8. Tulsa, Okla.
Annual healthcare services: $5,662.69
Annual taxes: $3,375.54
Annual utilities: $3,592.43
Annual housing: $8,115.94
Overall cost of living: $43,161.91
The cost of living in Tulsa is about lower than the national average, according to Sperling's. And homes are pretty affordable, too. The median home listing price is $159,900, according to Zillow.
7. Madison, Wis.
Annual healthcare services: $5,660.95
Annual taxes: $3,374.50
Annual utilities: $3,591.33
Annual housing: $8,113.45
Overall cost of living: $43,148.65
In 2014, the Milken Institute ranked Madison as the No. 1 best large metro in its Best Cities for Successful Aging report, largely thanks to the city's high-quality healthcare and healthy environment.
6. Kansas City, Mo.
Annual healthcare services: $5,653.42
Annual taxes: $3,370.01
Annual utilities: $3,586.55
Annual housing: $8,102.65
Overall cost of living: $43,091.22
Low living expenses, notably on groceries, help make Kansas City one of the most affordable places to retire. Plus, buying a home in Kansas City is affordable — the median home price is only $165,000, according to Zillow.
5. Rochester, N.Y.
Annual healthcare services: $5,601.25
Annual taxes: $3,338.91
Annual utilities: $3,553.45
Annual housing: $8,027.88
Overall cost of living: $42,693.62
Saving on retirement living expenses in Rochester shouldn't be that big of a challenge. After all, the city’s cost of living is almost 18 percent cheaper than the country’s average, according to Sperling's.
4. Salt Lake City
Annual healthcare services: $5,593.72
Annual taxes: $3,334.42
Annual utilities: $3,548.67
Annual housing: $8,017.09
Overall cost of living: $42,636.19
Your retirement savings should go far in Salt Lake City. But if you prefer living in suburbs, consider these top picks from Movoto: Bountiful, which has beautiful retirement housing options, and Midvale, which might attract active retirees.
3. Albuquerque, N.M.
Annual healthcare services: $5,477.22
Annual taxes: $3,264.98
Annual utilities: $3,474.77
Annual housing: $7,850.12
Overall cost of living: $41,748.21
Albuquerque is also one of the topcities where your paycheck and retirement savings go far. And when it comes to healthcare, retirees benefit from the fact the city has 233 physicians per 100,000 population, which is higher than the U.S. average of 210.
2. Tucson, Ariz.
Annual healthcare services: $5,445.92
Annual taxes: $3,246.32
Annual utilities: $3,454.91
Annual housing: $7,805.26
Overall cost of living: $41,509.65
Nearly 18 percent of the population in Tucson are senior citizens, reports Forbes. Besides being an excellent city to stretch your retirement savings, Tucson also offers one of the cheapest rents on apartments in the U.S.
1. Oklahoma City, Okla.
Annual healthcare services: $5,425.64
Annual taxes: $3,234.23
Annual utilities: $3,442.04
Annual housing: $7,776.18
Overall cost of living: $41,355.03
Oklahoma City is one of the best cities where your $100,000 retirement savings will go far in your first couple of years in retirement. And according to another GOBankingRates.com study, you only need to make about $44,180 to live comfortably.
Methodology: Cities were ranked based on their cost of living index relative to the average annual expenditures for retirees 65 and older. In order to find the average annual expenditures for retirees 65 and older, GOBankingRates.com used data from the BLS Consumer Expenditure Survey. Cost of living indices were taken from Numbeo on Nov. 30, 2016.
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Track spending and create a budget. Develop an accurate monthly estimate that includes all spending – annual taxes, vacations, phone bills, holidays, internet fees and cable, says Willie Schuette, advisor and financial coach at the JL Smith Group in Avon, Ohio.
"This will help you to see what is going out and should give you a better understanding of where you can make adjustments and hopefully, save money," he says.
Assess financial progress. Investors should do this each year,saysEllen Jordan, senior vice president at Bryn Mawr Trust in Bryn Mawr, Pennsylvania. Having a financial advisor will help many investors accomplish this.
"Consider working with a financial advisor that will provide you with clarity and understanding of what you have saved today, and what you want your retirement to look like," Jordan says.
The path to creating real wealth is to focus on living within your means, Jordan adds. "Avoid the temptation to spend money you don't have," she says.
Pay yourself first and max out retirement contributions. If you are 50 years or older, take advantage of the catch-up contributions to individual retirement account or 401(k) plans. In 2017, the contribution limits for 401(k) plans: $18,000 annual contribution and $6,000 catch-up. For the self-employed it's even greater: SEP-IRA $54,000 and solo 401(k) plan $60,000, Jordan says.
Make saving for retirement automatic. "Investors can set up automatic annual increases to their contributions levels," Rafal says. "This type of set-and-forget type planning is instrumental in long-term investing success."
Adjust your paycheck withholding level. A lot of people have too much tax withheld, they get a nice-sized refund and feel like this a windfall, Schuette says.
"It is not, it is your money. You simply paid too much and gave the government an interest-free loan," he says. "The goal should be not to owe any money or receive a tax refund come tax time – that means you are withholding just the right amount."
Check your credit report. If you find errors in the report, work to correct them quickly.
"Credit scores are a key factor in the amount of interest you will pay for loans such as a mortgage or for a car," Schuette says. "A low score can cost you thousands over the course of a loan."
Review your investment in stocks and bonds. As you get closer to retirement, consider moving toward a more balanced portfolio to reduce risk and volatility, Jordan says.
"Once you stop working, you are shifting from a saver to a spender, and declines in market value can be more emotionally unsettling," she says.
Start to dream about retirement. Asking yourself questions and developing answers can help you develop a solid financial plan. Krishnaswamy suggests considering these questions:
When do you want to retire?
What lifestyle do you want in retirement?
How long a retirement, or life expectancy, do you want to plan for?
How willing are you to adjust your spending during retirement?
How much do you want to leave to family and charities when you're gone?
How do you intend to fund potential long-term care expenses in the future?
Consider establishing lines of credit. These include home equity, asset-based and through a reverse mortgage.
"All have various benefits and limitations but can be used intelligently to provide flexibility and liquidity during retirement," Krishnaswamy says.
Clear the financial paper clutter. Over time, financial paperwork and receipts tend to accumulate.
"If you invest in a decent scanner, you can convert all your paper into electronic form and clean up your clutter," Krishnaswamy says.
"Some financial documents you'll still want to keep in hard copy form, maybe even in a safety deposit box such as estate planning documents, life insurance policies," he says. "But many other financial documents it's fine to keep electronically."