The primary objective of retirement planning is to be able to maintain a comfortable standard of living after you are finished with your career. Achieving this goal can be quite a challenge, particularly if you wait too long to get started with your plans.
According to the most recent Transamerica Retirement Survey of Workers, 40% of boomers expect their standard of living to fall in retirement and just 18% of Millennials are confident about their retirement plans. If you're not sure where to start, you're certainly not alone. Here are six secrets to creating a winning retirement plan.
1. Take Stock of Your Situation
It's difficult to know where to begin if you don't know where you stand with regard to your retirement savings. One thing that you can do is estimate your social security benefits on the SSA.gov website. You can also register for an account on the site for a more accurate picture. There are also online retirement calculators that can help you determine how much you'll need to save each month to reach your desired goals.
2. Understand the Rules
There are many different ways to save for retirement, and you want to make sure that you're maximizing your tax benefits as you save. There are also caps on how much you can contribute to certain investments each year. Take some time to learn about Roth IRAs vs. traditional IRA. Also, if your employer has a matching 401k program, be sure to take advantage of this benefit.
3. Create Diversified Investments
One thing you don't want to do is have all of your investments in one basket. Always diversify among several different types of investments and have a portion of your funds in safe options such as a Money Market Fund or a CD.
4. Eliminate Debt
Reaching retirement with a mountain of debt is not a good plan. In fact, if you still have student loan debt that you're avoiding by retirement age, the government could withhold your social security payments until that debt is paid off. Make sure that student loan debt or any high-interest credit card debt is paid off as quickly as possible.
5. Cut Back on Extravagance
Planning for retirement isn't usually considered fun, but it's a necessity. If you're currently living beyond your means, you may need to rein in spending to get started with these essential investments. Put together a household budget and see where you can cut back on things like eating out and expensive vacations.
6. Don't Neglect Estate Planning
As you plan for retirement, don't forget to make other important future plans. Your retirement investment accounts should have a beneficiary listed in the event that something happens to you.
Planning for retirement also means that you consider such things as health care, long-term care, and life insurance. If you haven't purchased a life insurance policy yet to protect your family's financial future, now is the time to do so. Contact us to request a quote from several top insurance companies.
While no one can make any guarantees about the future, it's difficult to have a perfect retirement if you don't plan. Start putting these items together now, and you will reap the benefits in the years to come.
Knowledge is power. The more you know, the easier it is to make an intelligent choice. Everyday life, as well as certain events and circumstances, require you to make choices. And peace of mind is gained when you feel good about the decisions you make.
When it comes to life insurance, IntelliQuote is there for you to make the intelligent, well-informed choice. From term life insurance to universal life insurance and final expense insurance, we make it easy for you to compare, shop and save. Get multiple quotes now and make the intelligent decision for Life.