10 Things to Do Now to Prepare for Retirement
Financial security in your retirement requires deliberate choices before you retire and during your retirement. Here are some useful tips. These 10 things you can do now to prepare for a retirement you will enjoy every day.
1. Saving for your retirement
Keep saving for your retirement every month, every year, starting as early as possible. Retirement may seem like it is a long way off, but the more you save early on, the more your money works for you. As you approach retirement, keep saving! In fact, save more the older you get.
2. Know what you will need to retire
With inflation and general economic uncertainty, it is difficult to know how much you’ll need to be able to retire comfortably. Experts suggest 70 to 90% of what you earn now is a good place to start. That can be hard to imagine replacing without earning an income, so create several income streams and assets to support you in your retirement.
3. Employer retirement plans are free money!
Amazingly, many people don’t take the free money their employers hand out in retirement plans. If your employer offers a matching program, take the money! Sign up and contribute using automatic deductions. Compound interest and tax deferrals make a huge difference to your retirement funds.
4. Pension plans
Many employers have traditional pension plans. Before changing jobs, ask what happens to your pension.
5. Investment principles apply
Ultimately, all your long-term savings are really retirement savings. Anything you don’t spend now will be available for your retirement. Use solid investment principles to invest all your funds, including your retirement plans. Reach out to a professional for assistance.
6. Don’t touch
Don’t withdraw your retirement savings early, as you’ll miss out on principal and interest and maybe even lose tax benefits or pay penalties. If you end up changing jobs, your savings are best invested in the current retirement plan, your new employer’s plan or rolled over into an IRA.
7. Ask your employer
Some employers don’t offer a retirement plan. If that’s the case at your job, suggest they start one. Even a simple plan can make a difference for both you and your employer.
8. Individual Retirement Accounts (IRAs)
You can put money into an Individual Retirement Account (IRA) every year. The contribution limits increase after your 50th birthday. IRAs provide tax advantages, too, so always contribute the maximum every year.
9. What About Social Security?
Social Security benefits usually replace about 40% of most people’s income on retirement.
10. Reach out to a professional
There are many things you can DIY in the world today, but professional advice to prepare for retirement helps you achieve greater financial security. The complexities of insurance and investments make professional advice a must-have.
Conclusion
These tips help point you in the right direction. Still, you will need more information to make the decisions right for your unique situation. Ask questions and get the practical advice you need to set yourself up for financial security during your retirement.
