Believe it or not, more than 64 percent of the American workforce isn’t financially ready for retirement even after working for decades. This means actually retiring can seem more like a pipe dream than an eventuality.
Luckily, there are a few things you can do to make sure you’re fully prepared for retirement when the time finally comes. You just need to make sure you follow the right path.
Here are a few key things to keep in mind when you’re getting your retirement plan together and saving for your future.
Have a Time in Mind
Before you can start planning your retirement in earnest, you need to figure out when you want to retire. There’s no right answer here.
If you want to retire when you’re 65, that’s the goal you need to keep in mind. If you plan to work until you have a certain dollar amount saved up, use that number to guide your plan.
Knowing when you want to retire will help you set better and clearer goals and will make planning for your retirement far easier.
Look at Your Spending Habits
When you first start getting prepared for retirement, it’s normal to think that you’ll be able to cut your expenses. While this can be true for some people, it’s not the case for most retirement-aged individuals.
Your current spending habits are likely the same or close to what you’ll end up spending each month once you do retire. In fact, it often goes up due to increased medical expenses and changing costs of living.
Take a look at your credit card statements, regular bills, and any other recurring expenses you might have.
If there are places where you can cut back and start saving money more quickly, now is the perfect time to start. The more money you save early on, the easier it will be to maintain the lifestyle you’re used to when you retire.
Start Getting Rid of Debt
The more debt you have going into retirement, the harder it will be to keep your finances in order. If you haven’t already, start paying down your outstanding debts as soon as possible.
Make more than the minimum credit card payments every month. Avoid taking out new lines of credit or personal loans so you can avoid worrying about high-interest costs. The more debt you can pay down, the better off you’ll be to enjoy your retirement without having to worry about high-interest fees eating away at your fixed income amounts.
Maximize Your Retirement Contributions
It’s always a good idea to have a retirement account in place. These accounts give you regular monthly income based on how much you contribute to them while you’re working. The larger those accounts are, the longer they’ll last, and the easier it will be to live a lifestyle you enjoy.
If you have a retirement account, start maxing out your contributions leading up to retirement. Have money automatically deducted from your paycheck if you don’t want to deal with the hassle of remembering to deposit funds regularly.
Identify Your Assets
When you’re preparing for retirement, you need to think about your entire financial situation. This means carefully examining the assets you already have so you can better plan to use them in retirement.
Your assets are anything with cash value. This includes your retirement accounts, your house, your car, your investments, and any businesses or business interest you own.
Though most people prefer to hold onto those assets through retirement, it’s possible to sell them to increase your retirement income. By making sure you know where your money is, you’ll find it easier to start creating retirement income plans that work with your needs.
Meet With a Financial Advisor
Before you retire, it’s a great idea to speak with a financial advisor. They’ll be able to look at your assets and identify things you can do to improve or increase the returns you receive.
Their goal is to help make sure you have the retirement income you need to thrive when you’re not working.
The sooner you can do this, the better. Bring the list of your assets with you to the appointment and get their advice.
They’ll look at your portfolio and help you decide how to best invest your money so you can build your wealth in the long-run. Just remember that it’s okay to speak with multiple advisors before you choose one to work with. The last thing you want to do is leave your money in the hands of someone you don’t trust.
Think About Your Loved Ones
Part of retirement planning is planning for your loved ones’ futures, not just your own. Unfortunately, you have no way of knowing how long you or your spouse will stay in good health or how they’ll manage if you pass away.
The best thing you can do is prepare ahead of time. Exploring different elder care plans and making sure your will is in order is a great place to start.
Speak with your attorney and make sure you have all the required documentation in place to look out for the people that matter most.
If you want to leave money to specific people or causes you support, make sure those allocations get outlined in your will. If you want to plan to provide for a loved one completely in your absence, start figuring out how you want to accomplish that before you retire.
Get Prepared for Retirement Now
Retirement financial planning takes time. The sooner you start the better off you’ll be and the more prepared for retirement you’ll feel.
Keep these tips in mind when you start looking into retirement planning options and you’ll be on the right track for a comfortable retirement.
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