Whether retirement planning energizes you or overwhelms you with options and details, we have good news for you. Many of our clients are surprised by how simple and stress-relieving retirement planning can be. Even if you are worried about your finances, having a simple plan in place can make a tremendous difference in your outlook and remove a source of long term stress. Here are a few ways that you can begin to plan for retirement.
SET UP AN EMERGENCY FUND
An emergency fund, such as a savings account or a money market account, can provide quick cash when car repairs or an emergency taps out your existing bank account. Emergency funds will keep you out of debt and prevent you from tapping into your retirement funds. It’s typical to save at least three months worth of expenses, but six months can be a good goal as you grow this fund over time.
CALCULATE A REASONABLE AMOUNT TO SAVE FOR RETIREMENT
Based on your current income, review what you can reasonably save over time for retirement. As your emergency fund reaches its target, you can potentially shift some savings over to your retirement accounts. Each month’s expense list should include a set amount for retirement.
SET UP INTEREST-YIELDING ACCOUNTS
The sooner you begin contributing to interest-yielding accounts, the better. Those with access to a 401(k) and a 403(b) can maximize their savings because of employer contributions. Over time the compound growth of these accounts will really add up.
However, even if you don’t have access to a 401(k) for retirement savings, you can still open a traditional IRA or Roth IRA account that will significantly improve your preparations for retirement. Even if you have a 401(k), consider adding an IRA to your retirement portfolio.
SAVE MORE FOR RETIREMENT WHEN YOU CAN
Over the years there’s a good chance that your salary will change, investment opportunities will come up, and expenses will shift. Make it a regular practice to annually evaluate where your finances are regarding retirement planning.
For instance, can you make a slight increase in your retirement savings each year if your company provides a raise in your salary? In other cases you may get a big tax return that could contribute to your retirement savings. Keeping up with your retirement contributions can play a critical role in keeping your retirement finances on track.
CALCULATE YOUR RETIREMENT EXPENSES
While no one can predict the future, as you near your anticipated retirement look at the expenses you expect. Will your active retirement lifestyle change your anticipated expenses by moving into a 55+ Community, will you stay put in your home, or will you plan to live in a Continuing Care Retirement Community? Seeing these living expenses on paper can help you plan a little more realistically.
Most importantly, once you’ve taken the time to put aside money each month and begin earning interest on your investments, we believe that you’ll have greater peace of mind about retirement. Doing a little each month can go a long way to keeping your retirement secure and enjoyable.
DO YOU NEED HELP PLANNING YOUR RETIREMENT?
We’ve helped hundreds of families plan their retirement living options and evaluate which community is the best fit. Contact us today to learn more about how we can connect you with the right community in your area. Call 833.405.0263.