When it comes to retirement, security and comfort are the two magic words of aspiration. It is every retiree’s dream to have enough money to sustain them through their retirement years. The truth is that retirement is much longer today than in the past, thanks to the fact that folks are living healthier and longer, creating an even greater need to focus on planning for your retirement. Planning your finances for retirement is no easy task, but there are specific measures that you can take to ensure that you are on the right track and that you have a peace of mind. Let’s look at seven useful retirement tips that can help you with your retirement planning.
- Get an Early Start on Your Retirement
The earlier you start saving, the more your money can grow. Begin the moment you start getting a paycheck, which under normal circumstance is when you are done with college. If you have an understanding of how much you need for retirement, begin as early as you can in order to give your savings time to grow.
- Save money Every Chance You Get
Retirement is more costly today because people are living longer, and so, you are looking at saving more money than you thought you needed to live out your retirement comfortably. Save significantly during your earning years, take advantage of your workplace-sponsored 401(K) plans, save roughly 10%-15% of your gross income, put money in your savings account monthly, and increase your retirement savings contribution every time you get an increase in pay.
- Think About Tax-savvy Retirement Savings
Open a Roth IRA-a pre-taxed retirement account with tax benefits that eliminate income tax on the money you have earned over the years. Essentially, it allows for after-tax savings and tax-free withdrawals under specific conditions that could fit your needs, and it’s a great long-term option.
- Play Catch Up if Necessary
Maybe having a solid retirement plan hasn’t been a top priority for you, but chances are, it’s not too late to improve your retirement savings contribution. Maximize your contribution levels, adjust your investment portfolio, take advantage of tax incentives, and continue investing once a retiree.
- Re-evaluate Your Approach to Investing
Investing in your 20s, 40s, or 60s, generally requires a different approach, depending on your priority. You can hire a financial adviser to create a game plan to grow and preserve your wealth at any age. Whether your approach is high-risk, conservative, long term or short term, you have to choose the best approach for you.
- Create a Spending Plan
You should avoid dipping into your retirement savings unless you absolutely need to do so. When withdrawing money from retirement savings, stick with the recommended 4% per year, or lower your expected withdrawal rate to be safe. Your spending habits need to match your life goals, and a strict budget can help to achieve that end.
- Extend Your Retirement Savings
Making your retirement saving last is crucial to the quality of life that you’ll have as a retiree. When retirements can last as long as 30 years, you want to avoid switching huge portions of your asset to cash and fixed-income investments, keep some money invested in stocks, stick to a budget and perhaps work part-time when retired.
Andrew Kyriacou can assist with your retirement planning and provide you with the peace of mind you need to head into retirement. You don’t have to do the hard work of planning by yourself, and will be guided into creating the comfortable retirement you dream about for yourself.