Setting up for financial security when you retire isn’t a factor that enables itself. Those who act early and procure retirement plans, like a 401(k), are planning for a time when money may be tight. Retirement planning takes effort, commitment, and forethought.
Worried about setting up your retirement future? Unsure if after you reach retirement that you won’t have enough money to live comfortably? Then continue reading.
In this post, we’ll provide you with 10 tips to prepare for retirement.
1. Save, save, save! If you have already started saving, then don’t stop! Your savings is your first line of defense against a sinking retirement ship. The more money you pack away, the more secure your future is. Consider establishing a concrete plan to squirrel away extra money as soon as possible.
2. Contribute to your 401(k). If your current job offers a 401(k), then it behooves you to add to it. A 401(k) allows you to contribute pre-tax money, meaning it is untouched; a significant advantage because it’s dollar for dollar.
3. Set a retirement goal. Much like our first tip, planning ahead is key. Many retirement specialists agree that you will need around 70-90% of your pre-retirement income as a nest egg once you hit the age to retire. Otherwise, you will not be living at your current standard, and will have to make many sacrifices that you will likely not want to.
4. Match your employer. It really is that simple. If your employer matches your 401(k), do not hesitate to take full advantage of the match. Look at it as free money, an incentive for you to contribute, and sign on immediately. Unsure if they do? Ask!
5. Consider an IRA. Much like a 401(k), an IRA brings with it huge tax breaks, but it’s important to pay attention to which plan is which. A traditional IRA gives a tax-deferred growth, with a smattering of benefits for withdrawal, and some deductions for your taxes. While a Roth IRA doesn’t offer deductible contributions, but lets the saver enjoy tax-free growth — meaning you pay nothing for withdrawals. Speak to a specialist to help you decide which is best for you.
6. Consider a catch-up contribution. Those who are 50 or older have a wonderful option available for their retirement. Called a catch-up contribution, it allows for those who didn’t have the ability to save like they would have liked, to boost their retirement savings. Ask your retirement planner about how to take advantage of this kind of retirement.
7. Long-term growth stocks. Don’t think of like you are playing the stock market, that’s a different kind of future. Instead, consider it like investing in the long-term. Stocks, after all, have the best return over long periods. So if you get a good stock tip, or know a solid broker, play your cards right, and invest in your retirement through stocks.
8. Bonds only work sometimes. Bonds used to have great staying power, prompting many individuals from yesteryear to invest heavily into them. Now, after 15 or so years, inflation begins to erode bonds, erasing the paying power they once had. So if bonds are an option, do your research beforehand.
9. Research what your Social Security benefits will be. Most American work their entire lives, contributing to Social Security with every paycheck. When you retire, Social Security contributes around 40% of what you would have made each month. Don’t hesitate to add this to your total when you are retirement planning.
10. Delay Social Security for max return. Many people accept Social Security as soon as they are eligible; no harm in that. However, for every year you delay it, once you are able to collect, you earn that much more when you aren’t able to work any longer, a boost that adds up very fast. So if you plan accordingly, and can work longer, delaying Social Security brings with it many benefits.
It’s never too soon to begin planning for retirement. Once you recognize that its time, that’s when you should take the next step. Don’t let starting too late end up as a regret in later in life, take action now.
For more information on how we can help you with your retirement, please contact us any time. We protect the people you love and the assets you love through thoughtful planning.
The post 10 Things to Help You with Retirement, and How to Boost Your Savings appeared first on Estate Planning Lawyers | Elder Law Attorneys | Brighton | Novi | Livonia Elder Law Attorneys.
