46% of Americans believe they won’t have enough money for retirement according to a Gallup survey. Every 1 in 5 Americans older than 65 is still working – through the Wuhan virus pandemic hurt many people. This is because they cannot afford retirement. However, there are steps you can take to prevent this from becoming your reality. These are 5 things you should do right now to make your retirement easier and pleasanter.
1. Prepare Your Finance
You need to come up with a retirement plan for which you need to start preparing your finances. You should know your exact spending habits and the kind of money you are expecting to make. This is one of the most important steps of getting ready for retirement.
Make sure you are not conservative in calculating the amount of money you will require after you retire. It’s better to err on the higher side. Tally up various income streams, like pension and Social Security to know the amount you will generate.
2. Use Retirement Accounts
When you are getting ready for retirement, you need to take full advantage of catch-up contributions and retirement accounts. Increase your annual contributions to the maximum limit allowed (wherever possible) in your IRAs, 401(k), and other plans. You should aim to qualify for the maximum matching contribution in 401(k) offered by your employer.
You may be able to set aside a higher amount if you are 50 or older. Account consolidation may simplify investment management as you near retirement and offer a clearer picture.
3. Get Ready for Retirement by Investing for Growth
It is easy to shy away from investing in stocks, especially with the current risk scenario. However, stock growth may prove to be an integral aspect of your portfolio. You should seriously consider maintaining mutual funds, bonds, stocks, and other assets as per your risk tolerance, liquidity needs, and investment time horizon.
Well-balanced portfolio can go a long way in helping you weather market downturns. It can also help you generate enough income to cover your expenses post-retirement for at least three decades.
4. Pay off Your Debt
This is one tip you should consider right now. Try downsizing your mortgage payments as much as possible. A little sacrifice today will help you remain comfortable when you retire. You should consider paying major purchases in cash to curb any new credit card debt.
You don’t always need to grow your investments and savings to ensure you have enough left. By reducing debt, you essentially reduce the amount spent on interest payments when you retire.
5. Get in Touch with a Financial Advisor
There are many financial advisors that can help you consider the right factors and make the right decisions. You can consider online financial advisors if you lead a busy life and can’t take out time for a physical appointment.
Financial professionals can help you save and earn more. Their expertise and advice can easily make up for the amount you pay them. However, you need to make sure that you choose a reliable and experienced professional. Ask your friends and family for strong references.
