With people living longer and spending as much as 30 years in retirement, if you want to maintain a moderate standard of living, it is essential to plan your retirement well in advance to secure your golden years.This article outlines 6 ways to do just that.
So says Arthur Adams (ampminsure.org/) in edited excerpts from his original article.
Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!) has further edited ([ ]), abridged (…) and reformatted (some sub-titles and bold/italics emphases) the article below for the sake of clarity and brevity to ensure a fast and easy read. The authors’ views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.
Adams goes on to say:
Unfortunately, very few are concerned about their retirement years and are unaware of the ways they can be harassed if they have debts during this time. Pre-retirement planning, including having all the necessary insurance policies in place, is a necessity if you want to stay on top of your finances. Here are some retirement planning tips:
- Start saving early: Whatever step you take to repay your debt obligations while you’re young, you should make sure that you start saving early for your retirement. You should save at least 10% of what you make in a month so that you can build the emergency fund that you can fall back on during tough economic times. The rise in the number of bankrupt seniors in the US is solely due to the number of people who are not saving when they should.
- Know your retirement needs: Your needs keep on changing with time and when you retire it will change a lot as you’ll not tend to go out as often as you used to earlier. You should determine what you may need in order to formulate a plan that can help you meet all your retirement needs. Take charge of your financial future so that you don’t take wrong steps in the long run.
- Contribute money to your workplace 401(k): If your employer offers you a 401(k) account… [then take full advantage of the opportunity and]contribute [to the maximum allowed] and irrespective of the matched contributions by your employer. Also, don’t withdraw money from this account as and when you need as this may become chargeable before your retirement age.
- Get adequately insured: As you’re aging it is more likely that you will be prone to disease and accidents. The only way you can stop burning the hole in your wallet is by getting yourself basic insurance policies [such as] health insurance and auto insurance. Get enough coverage so that in the event of a mishap you don’t shell out… [more money than you can comfortably pay].
- Allocate money to an IRA: An IRA or an Individual Retirement Account is yet another retirement plan that can help you lead a debt free retired life. It is best if you can put up to $5500 a year into the IRA account and if you’re 50 and older you can contribute even more. IRAs offer you tax benefits but make sure you don’t withdraw money from this account whenever you want as this will nullify all benefits and you may even be subject to taxes.
- Determine basic investment principles: How you save your dollars is equally important as how much you can save them. As you’ll be living on a fixed income, you should always consider the basic investment principles following which you can make money by earning profits. Choose the best asset that can ensure maximum returns and minimum loss. You [should use] an investment advisor…[to] get expert advice and [make full] use it while taking the plunge into the investment market.
If you don’t want debts to mar your golden years, you should follow the steps mentioned above. While you’re working, get help from a debt professional so that you can reduce/eliminate all your financial worries while you’re earning your bucks.