For many, retirement seems like a time in the future they will never reach. For others, it seems right around the corner. Whether you’re facing one year or many, there are things you need to do to prepare for this new stage in life.
Evaluate Current Savings and Expenses
If you are planning, near or in retirement, you need to track your spending and saving strategies. Keeping your expenses at a minimum while increasing your savings are two great ways to save more for retirement and reduce spending once you are in retirement.
If your budget allows, contribute to retirement plans more. If you have 401(k) with an employer, max it out, and make sure you are taking full advantage of any matching contributions they offer. If you are already maxing out a 401(k), or similar retirement plan, contribute to a Roth IRA. This will give you tax free spending to offset your taxable income received from your employer plan.
Don’t use Retirement Assets for your Children’s Education
If you’ve saved money for your children’s education but they need more to pay for school, make them take out a loan. Using your retirement assets to help them out is a bad idea. They have a lifetime to pay off a loan, but you’d have limited time to make up what you’d spend on their education.
Life in Retirement
If you are in or near retirement, you have to determine what kind of life you want to live. Do you want to travel once a month? Your nest egg would need to be much bigger. Many retired people downsize their home. Their kids have moved out and they no longer need as much space as was once required.
Retirement is a whole new journey for all who are fortunate enough to make it. There are many steps that need to be taken to ensure you live the life you want in your golden years. Everyone’s personal financial situation is different and needs to be planned accordingly. Please consult with a financial professional when making any financial choices.