Ask any worker if they’re looking forward to retirement and chances are you’ll get a hearty “yes.” However, ask those same people if they’re ready for retirement, or if they’ve even really made any financial plans for it, and there’s a good chance you’ll get a very different response. As excited as people are to retire, very few people know how to prepare for this inevitable stage in life.
By planning now, you can take steps to ensure your retirement years are comfortable and full of life.
Here are five tips that you can do now to help you get ready for retirement down the road:
Save More Cash
Very few people actually have much cash in their accounts. Once you pay bills, get groceries and do other things, there’s very little left. However, cash stored in savings and other easy-to-access accounts is a necessary first step. Not only does it help with your day-to-day expenses after you retire, it can also help during those first few months as your finances transfer. It’s not unusual for some retirement funds to take a few weeks to kick in, so having that extra bit on hand can be very handy.
Plan How Much You Will Need
Many people reach retirement, only to find out too late that the income from their pension, Social Security and other retirement plans simply doesn’t cover their expenses. Too many people bury their head in the sand and hope things work out. Get your head out of the sand and start now by estimating how much you’ll be bringing in, and how much you’ll be paying. Will you have enough to pay bills? Buy groceries? Visit family? Planning ahead now can help you reach those financial goalposts.
Think About Taxes
Most retirement plans involve paying taxes at some point. Whether you’re going to move, cash out stock, draw from an IRA or do something else, you will most likely have to pay taxes. In addition, your change in status might change your overall tax footprint. Figure out your tax needs now so you aren’t hit with huge, unaccounted-for expenses later.
You should also think about contributing to a Roth IRA for tax-free growth. This can be a tremendous strategy for younger individuals.
If you’ve ever talked to a financial advisor before, they’ve told you about the need to diversify your investments. The same is true as you approach retirement. The last thing you want is for your planning to take a hit because of a downturn in the markets. Diversifying your investments will lower your risk increase your odds of success down the road.
Don’t Wait to Learn
The time to start learning and planning for all this is now. If you wait until retirement is right around the corner, you’ve waited too long. Start educating yourself now about your options. Make sure you take the steps today to ensure a successful retirement in the future.
If you have any questions or think that we can help, please reach out to us today!
Written by Eric Keating