Are you prepared for retirement?
Planning and preparing for your next chapter well in advance is the best way to be ready – financial security doesn’t just happen without careful thought.
When you plan ahead, you:
- Have the luxury of deciding when and how you will retire
- Know more about your family’s budget and what your expected budget will be in retirement
- Pursue confidence regarding your financial insecurities
- And you are more likely to live the same lifestyle in retirement as you’ve become accustomed to during your earning years.
The list can go on and on for the benefits of planning ahead – and I want to help.
Here are 10 ways you can prepare for retirement:
1. Set goals and stick to them.
If you’ve already started saving, keep saving. If you’re not saving, it’s time to get started. Saving is a rewarding habit, and it’s never too early or too late to start.
2. Determine what your retirement needs will be.
Believe it or not, retirement is expensive. It’s smart to plan on needing 70% (or more) of your current income when you stop working, if you want to maintain your current lifestyle.
3. Contribute to a retirement savings plan.
You may be someone who is employed by a company with a 401(k) plan that matches your contributions (up to a limit). Or you might be self-employed and have to maintain and contribute to your own retirement account.
Whatever your individual situation is like, make sure you contribute.
Get educated on your personal situation, and that way you can make a decision with your retirement savings that’s in your best interests.
4. Plan for the unexpected.
It’s difficult at best to go into retirement expecting the worst, but it does happen. If you put in the effort and plan for the unexpected now, you are less likely to get caught off-guard later.
Issues can range from minor to major, but be prepared to weather these storms: roof leaks, serious illnesses, early death, accidents, nursing homes, etc.
Discuss these scenarios with family and your trusted support circles, so you’re mentally and financially prepared to face them.
5. Get your risk management in place.
Yes, risk management, i.e., insurance is not something that’s fun to talk about, but it’s necessary.
There are different types of insurance to consider such as:
- Life Insurance
- Long-Term Care Insurance
- Short- and Long-Term Disability Insurance
- Car Insurance
- Home Insurance
- Health Insurance
- Pet Insurance
- Cancer Insurance
- Dental insurance
- Eye insurance
- Etc.
If you don’t understand what one of these entails, please do some research or ask your financial advisor or another trusted individual for help.
6. Educate yourself on investment vehicles.
How you save is as important as how much you save.
Taxes and inflation impact your savings. The type of investment carries varying amounts of risk.
Learn about diversification and how it will impact your overall picture. Your risk tolerance will change over time. Working with a financial advisor you trust can be extremely beneficial in determining the investment vehicle that’s best suited for you.
7. Do not touch your retirement savings.
Once you start saving for retirement, keep those funds for that purpose, and that purpose only – retirement! You not only lose the power of compounding over the long run, you will more than likely incur considerable taxes and penalties if you withdraw retirement savings too soon.
8. Know what money comes in and what goes out.
In other words, have a budget.
Slight variations in one’s household budget over time can have a huge impact on the long-term picture. Control your spending. Work on eliminating debt so you’re not paying interest, Instead, save money and have the interest coming your way.
9. Start now.
One of my favorite sayings about saving money for the future is, the earlier you start, the less money it takes.
10. FINALLY – ASK QUESTIONS!
I can’t emphasize enough how important it is to educate yourself on your financial health.
Knowledge is powerful and will help you in gaining confidence with your financial insecurities. Ask questions and make sure you understand the answers you get. Work with a trusted financial advisor that offers sound, practical advice.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. No strategy ensures success and investing involves risk including loss of principal.