When most reach age 55, they begin to think about their retirement. If that’s you, here are nine tips that will help you properly plan for retirement.
- Cut Back on Spending – If your kids are out of college or living on their own, your spending needs decline. This is the time to sit down and figure out how you are spending your money. It is also the ideal time to make adjustments to your spending habits, so that you have more money to invest in your retirement. Some of those spending adjustments that will enable you to save more include:
- Putting off Vacations/Less Expensive Vacations
- Buying a Used, rather than New Car
- Downsize into a More Affordable Home
- Boost Retirement Plan Contributions
- Refinance Mortgages to Lower Rates or Longer Terms in order to reduce your monthly mortgage payment, which helps increase your ability to save.
- Tax Harvesting – Sell low cost investments, when the stock market is down, and move that money to investments that are Tax Advantaged: tax exempt bonds, annuities, whole life insurance, IRAs, Roth IRAs and Health Savings Accounts.
- In-Service Rollover- Rollover part of your Retirement Plan (401k, 403b, 457 Plans) into an IRA, which offers you more diversity in terms of your investment options.
- Convert to to a Roth IRA – Convert part of your Traditional IRA to a Roth IRA. Distributions from a Roth IRA are Tax Free.
- Re-Evaluate Your Risk Tolerance – As you get closer to retirement, your Risk Tolerance should decrease. Adjust your investments to be more consistent with your Risk Tolerance.
- Don’t Panic – Stick to your financial/retirement plan. If the plan is sound, don’t make emotional decisions, just because the stock market goes down.
- Delay Retirement – If you don’t feel you have enough saved for retirement, you can always delay your retirement a few years and play catch-up
Posted in Rich Habits Tips - General, Smart Money Habits
