Everyone hopes for a successful retirement. It takes a lot of planning and hard work to achieve it. In this article, we will go over six tips that will help you to achieve your successful retirement.
Set Goals
Goals are the foundation of a successful retirement. They give you the basis to know what you need to work towards. You will need to think about such long-term goals as how much you want to have saved for retirement and what type of lifestyle you want to maintain. These goals may change over time, so it is important to regularly reevaluate them. You also need to set short-term goals that will help you to stay on the track to reaching your long-term goals. Short-term goals include things like keeping your expenses to a minimum, maximizing your savings, and keeping taxes low.
Find Your Timeline
The age at which you retire is not a one size fits all situation, it is a very individualized decision. And that age will be subject to change depending on circumstances in your life. For example, declining health or unexpected wealth can cause your projected retirement age to change. Your full retirement age for social security benefits should also be a determining factor. As well as your retirement savings balances.
Fully Utilize Savings Tools
It is also important that you fully utilize all retirement savings tools that are available to you. This would include maxing out your contributions to employer-based plans- such as a 401k, 403b, 457, SIMPLE, or SEP. These plans will be the foundation for your nest egg, so fully utilizing them is vital.
You will also want to use Traditional and Roth IRAs to your advantage-both from savings and a tax standpoint. Also, do not underestimate the power of a Health Savings Account. An HSA can help you to keep from spending your nest egg down on medical expenses. HSAs also have tax benefits.
Plan for Retirement Income
After retirement, many people still have income coming from a secondary source. This might be from an investment property, a small business, or a part-time job. If you are considering having some form of income after you retire, it is important that you plan appropriately. This is especially important to help manage the effect the income will have on your taxes.
Plan as a Couple
If you are married, it is important that you plan for retirement together. This is especially true when it comes to your timing for filing for social security benefits. You will want to find the best time to file that will give you the maximum benefits for you and your spouse. You will also need to consider when you are both planning on retiring. If you are both retiring at the same time it will be a bigger change and challenge than if you were to retire a few years apart. Additionally, you will need to consider what will happen if one of you passes. Will the survivor have enough to live comfortably and maintain the same lifestyle?
Mind the Endgame
For most, the age of 50 is when the retirement endgame begins. This is the final stretch before you retire. During this time, it is vital that you really fortify our nest egg and take advantage of increased catch up contribution amounts. It is also important that you take the time to review your investment portfolio more frequently. Your investment choices should help to mitigate risk, but not be so conservative so as to hamper growth. One to two years before you retire, you should review your health care and home repair needs. If there is anything that needs to be done, you should try to complete it while you still have income and employer-provided health coverage.
You Can Achieve a Successful Retirement
Achieving a successful retirement is possible! Following these six steps and having a financial plan will be vital to your success. The sooner you implement them, the better. It is also important that you regularly update your financial plan to reflect changes in your life.
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