Retirement doesn’t just happen. It takes years of planning. We have come up with some helpful tips to guide you in your plan for retirement.
1. Save. Many who retire have not saved up enough to last. Retirement is usually 20-30 years, which is the longest span of life. Also, retirement funds or pension is not paid out immediately. It usually takes several months or more to receive your first check. It is wise to have enough money in your savings for at least six months of your budget before you retire.
You should also know the maximum amount you can contribute to your 401(k) or 403(b) accounts and IRA’s. Consider limiting your expenses, having a reasonable budget and tax planning to help get the savings you need to live on throughout your retirement.
2. Budget. Creating a budget is one of the key factors in a successful retirement. However, there are many things that get overlooked when planning a budget. Don’t forget about inflation, emergencies, medical expenses, and more. Only a small percentage of people integrate a plan for helping their parents and/or children. Many times those that retire have parents that are still living and may rely on them for income.
When it comes to helping out your children you should have a certain amount set aside to help in case of an emergency. If it isn’t an emergency then you should not be afraid to say no and tell them that you are living on a fixed income.
3. Maximize Social Security. You may choose to start collecting Social Security right away; however, you should look at the benefits to waiting a little bit longer. Some may end up earning up to $100,000 or more in their lifetime by waiting. It is best to talk to your financial advisor to find out what age is best for you to start receiving this benefit.
4. Ask for help. Many baby boomers have a “do it myself” type of attitude. They are use to going online and researching. There is a lot of misinformation out there. It is okay to and you should ask for assistance from a financial advisor.
5. Have an open mind. Planning a budget can seem scary and feel like you are losing your freedom when in fact it is doing the opposite. Having a budget will give you the financial freedom throughout your retirement. There are a lot of opportunities to plan and save for your retirement. Give us a call to find out more.