When it comes to retiring most people have heard that they should plan ahead and plan well but have never actually been given the advice that they need to do said planning. With that in mind we put together a list of the best retirement planning tips that we know. Hopefully you will be reading these before it is too late to actually start using them. No matter where you are in your life however it is always a good time to start planning for retirement. Enjoy.
1) Although you should start as early as possible it is never too late to start saving for retirement. That being said, the earlier that you can start the better so that you can take advantage of the most important factor when it comes to saving, compounding.
2) When setting your retirement goals be as realistic as possible. There are a number of tools available online that can help you to do this and, the more honest you are about your lifestyle and what you would like it to be when you are retired the better.
3) One of the best ways to save for retirement is a 401 (K) account. In most cases your company will contribute matching funds and a 401(k) gives you an immediate tax deduction and savings that can grow while being tax-deferred.
4) An individual retirement account or IRA also offers huge tax breaks. The two types available are the traditional IRA which offers tax-deferred growth and a Roth IRA which doesn’t allow for deductible contributions but also offers tax-free growth and the ability to make withdrawals without paying taxes.
5) Keep in mind that how you divide your portfolio between stocks and bonds will more than likely have a very big impact on any long-term returns that you see. In other words, focus more on where you allocate your assets than on individual stock or bond pics.
6) When it comes to retirement planning stocks are the best for long-term growth. In most cases stocks grow faster than inflation which of course means that the nest egg you end up with when retirement arrives will be bigger.
7) Inflation can easily erode any interest that you may make with bonds and so we recommend that you don’t rely too heavily on them, even in retirement.
8) Drawing money from your taxable accounts first and letting your tax advantaged accounts compound for as long as possible is one of the most efficient ways of stretching your retirement dollars.
9) If you are physically capable working a part-time job during retirement is also an excellent way to stretch your retirement funds. Not only that but it is a great way to get out of the house, meet new people, stay mentally active and studies show that people who work part-time in retirement are happier.
10) There are many other things that you can do to stretch your retirement funds, most of which involve doing things that cost you less. For example, relocating to a state with a lower cost of living is an excellent idea, especially if you have family that lives in the state that you wish to move to. The point here is that you should keep your mind open to all of the possibilities available to you, especially if you’re keen on keeping the lifestyle that you are accustomed to.
The 10 tips above are some of the best that we know and we hope that they have opened your eyes to some of the possibilities that you have when it comes to retirement planning. Learn them, use them and, if you need to, you can even modify them to make sure that your golden years are as golden as you thought they would be