Tips from a Retirement Planning Advisor
One thing is for sure. Retirement is far, far away until it is suddenly tomorrow. Time flies and retirement creeps up. Once you get past 50, you can see how important the advice from a retirement planning advisor becomes. Our increasingly volatile world means it’s never too soon to start planning and implementing your plan.
This helpful retirement advice will make the most of your retirement savings efforts. Discover ways to create a plan that sets you up for a comfortable retirement lifestyle.
Work Backwards – Determine your Retirement Income Requirements to Create an Income Plan
Many people try to start their planning by figuring out how much they can “comfortably” save for their retirement while they are working. Unfortunately, that approach often leaves retirement funds short. So, by working backwards, starting with determining your retirement income requirements, you can more accurately figure out how much money you will need.
To figure out how much you need to support your retirement lifestyle, start by building a (flexible) budget to cover your expenses. Break down your budget into these categories:
Food, housing, utilities, transportation, insurance, phone bills, healthcare etc.
Travel, hobbies, gifts, activities, leisure, etc.
Check your current expenses to see what will continue after you retire and what will not. For example, your car insurance may go down when you are driving less and not going to work. Then again, it might go up as you have more birthdays. Do some research.
Add everything up. Carefully examine what each expense adds to your lifestyle and decide what is most important to you. Then figure out how much income you will need every month. From there, a Retirement Planning Advisor helps you create your uniquely customized retirement plan. That plan meets your goals and prepares you to deal with the sort of volatility the past has demonstrated.
Tackle Your Debt
Once you retire, paying down debt is an incredible burden. So much so that many people with debt keep working. They lose out on the freedom of the early years of retirement. Pay off your existing debts and work to not create any more before you retire.
Remember the Magic of Age 59 ½
Pulling your money out early from a 401(k) or an IRA, or any other retirement account is expensive when it is not done correctly. You can make penalty-free withdrawals at age 59 ½, but if distributions before 59 ½ cost you the taxes and a 10% penalty. Talk with a retirement planning advisor before withdrawing from retirement accounts.
Use Your Employer’s Money
Most companies offer retirement plans like 401(k)s or 403(b)s. You contribute a portion of your pay to save for retirement, and the company matches your deposits. Some matching programs increase as you get older or only match a certain percentage. But either way, you instantly see the match as a return on your money! Take every penny of the free money your employer matches.
Meet your Retirement Planning Advisor
Financial planning decisions can be time-consuming and stressful. But not making decisions is far more stressful! A Retirement Planning Advisor will help you set up a base retirement budget, make world-class investments, and diversify your portfolio. Plus, your advisor implements your plan to help you achieve your retirement lifestyle goals.