Retirement planning, save more! Many retirees find they can’t afford to live comfortably after their last day of work. They say hind sight is twenty/twenty, but devise a plan now to avoid becoming one of these retirees. It may be painful now, but spending less of your disposable income each week on things like eating out or fancy coffees can prove beneficial in the long term. The reduction in your income from a full time position to social security can be a significant adjustment.
Consider these ideas while planning your retirement years.
SAVE MORE
Successfully building your 401k plan or savings account throughout the years is one way to offset this income adjustment. Retirees who are less confident about their financial situations say they regret not saving more.
As you start your career, enroll in your 401k as soon as possible. And, save the maximum amount permitted by your plan. If you cannot afford the maximum amount starting out, make sure you contribute at least as much as the company matches.
Avoid early withdrawals at all costs. The more time each dollar remains invested in this plan, the greater its value at retirement.
Build a retirement plan
Having a written financial plan is likely to make you feel more confident about your finances. It is important to plan whether you are just starting out, approaching, or already retired, even though many people skip this step.
You can do this on your own. There are many useful tools on the internet to help you get started. Better yet, find a qualified financial planner to assist you with all the areas that you should include in your plan. A financial planner always puts your needs first. As a fiduciary, they are legally bound to make decisions in your best interest, regardless of the cost. When you choose a financial planner, you’re choosing someone who will look out for your financial interests and make them a priority.
Consider Healthcare Costs in your retirement planning
You should get a reasonable estimate of your health care costs, and make sure you can afford them before you retire. Medicare does not cover everything. Some spend exorbitant amounts of money in out-of-pocket costs in retirement.
Long-term care, if needed, is another cost to consider. If they are started early enough, many companies offer insurance plans for long-term care that can be affordable.
retirement planning includes fun
In today’s terms, retirement fun can be costly. Many retirees think they will spend less money once they retire, as their income has decreased. Many planners suggest you plan your retirement spending as if everyday is now “the weekend”.
Your free time is now more than just two days each week. Retirees tend to spend more time socializing with friends, vacationing, playing golf, attending concerts, and engaging in other activities. Now they have seven days a week to enjoy these activities.
This means you need to save extra money to live the active lifestyle of this retiree.
Learn how to shield your money from taxes
Taxes are a significant consideration for retirees. Uncle Sam can take a big chunk out of your nest egg. Always remember that any monies in your 401k plan will be taxed upon withdrawal. While you hope you are in a lower income tax bracket when you begin taking withdrawals, it can still be a significant drain on your balance.
Consider Roth conversions, taxable income shifts, and other strategies that can lead to significant savings. This is where a financial planner can help.
study personal finance
Read, read, read! Learn as much as possible about debt, taxes, budgeting, and investing. Make sure to remain current in as many of these areas as possible. Remember, knowledge is power. And, speaking of power, the next thing you see HERE AND NOW is an amazing opportunity to build multiple income streams working from home. Research this while planning your retirement. It will certainly surprise you! Rory Ricord has been in business for years and is an amazing teacher, leader and mentor.
Consider working longer when retirement planning
Working longer is the answer if you’re worried about outliving your savings. This can let you wait longer before collecting your Social Security. If you delay claiming your benefits until age 70, you will earn much larger monthly payments than if you started claiming at or before your full retirement age.
You can continue to contribute to your retirement savings, leaving your nest egg untouched longer. This allows you to have more money to use later, giving your savings more time to grow and compound.
By continuing to work, even if part time, you are challenged daily with projects, tasks, and deadlines. You risk losing some mental acuity if all that vanishes in retirement. Working allows you to enjoy better mental and physical health.
remain relevant when retirement planning
It’s not uncommon to measure ourselves and others by career status and achievement. Some can experience an identity crisis when retiring. If you are not concerned with your retirement savings, there are alternatives to your full time career.
You can find ways to use your skills in a new way. Consider part time or volunteer work. You can even begin working from home. When you retire, build new social networks through your church, neighborhood, classes, clubs, etc. This makes for a healthier relationship at home.
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