Enjoy the Next Chapter of Your Life in Peace
re you looking forward to the days when you no longer have to work? Retirement may be good motivation to work harder now for a more comfortable life later on, but are you really ready for it?
5 Steps to Take to Reach Your Retirement Goals
Whether you already have a plan in place or not, here’s a quick guide that could help you achieve your retirement goals.
A 2019 survey conducted by the Employee Benefits Security Administration revealed that you’d need at least 70 to 90 percent of your preretirement income to sail smoothly in retirement. You could make this transition easier by planning ahead. Lay out your expenses and try to set aside money for emergencies. Having the means to pay for everyday expenses could be very different compared to being prepared for unexpected situations. Another survey conducted by Civic Science mentions that 77 percent of U.S. residents fear high inflation rates. Since high inflation leads to an increase in the price of goods and services, it could affect your purchasing power. That, in turn, could compel you to dedicate more money toward household expenses and less toward retirement contributions. Having a well-thought-out course of action could help make unprecedented financial problems more manageable.
Set Money Aside Specifically for Retirement
Although saving money is a given, it is advisable to add a little extra to your retirement savings for some wiggle room when the time comes. If you haven’t started saving yet or don’t know where to begin, you could start small and gradually increase your contribution to retirement funds. Experts suggest that a ballpark figure of nine to 11 times your current salary would be a good start, but having more certainly wouldn’t hurt.
Do the Math
If you know when you want to retire, have you checked if the math adds up? To find out if you are saving enough money at the moment, you can use a retirement calculator to gain insight into how much you need to save now for a comfortable retirement.
Contribute to a Retirement Plan
Many employers offer their employees a 401(k) retirement plan to grow their pre-tax paycheck money in a mix of stocks and bonds exempt from tax. You can start making penalty-free withdrawals from the age of 59 and a half. One can also increase their 401(k) contributions to take maximum advantage of employer-matching schemes since companies could match contributions up to 6 percent of your annual salary. Imagine, you have an annual salary of $100,000, and opt for a 401(k) dollar-for-dollar employer matching scheme, where your employer adds $1 for every $1 you contribute up to 4 percent of your annual pay. So, the maximum possible amount your employer could contribute for that year is $4,000, which is completely free money. Those who are self-employed could open a Simplified Employee Pension (SEP-IRA) account from the IRS, which offer similar benefits to a 401(k) without employer contributions and a lower contribution limits.
Consider Investing Your Money
There are plenty of investment options out there that could help your money grow. However, if you have absolutely no idea how investing works, it would be best to seek guidance from a professional. A financial advisor could help you create an investment plan based on your personal goals and current financial stature so you could eventually achieve financial freedom.
What Are Fiduciary Advisors and How Can They Help?
A fiduciary advisor is someone who should act with honesty and integrity and will make decisions based on what might benefit you the most. They are ethically and legally bound by law to offer clients the best investment solutions. An in-house advisor will analyze you portfolio, finances, emotional intelligence, and future aspirations to curate a personalized roadmap towards a stress-free retirement.
Where to Find Reliable Fiduciary Financial Advisors
To know if a financial advisor follows fiduciary standards, you could run a check through the National Association of Personal Financial Advisors‘ database. Companies like SmartAsset could also be a huge help. This emerging fintech is known for their award-winning financial calculators and client-advisor matching services to help people make educated money moves. When you take a brief online quiz, then their concierge team will attempt to match you with up to three fiduciary financial advisors near you within minutes.
They also have an interactive retirement calculator that you could use to figure out how far you are from you retirement goals, and what changes you need to introduce in your finances to maximize savings without straining your monthly budget. They also have other tools like a 401(k) and Social Security calculator to help you come up with a ballpark figure of how much your income might be after you stop working.