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Monday, November 23, 2020

Your Guide to Successfully Preparing for Retirement

While you're young and busy with your career, retirement might seem like a long way off. However, life goes by quicker than you think.


Therefore, it's important to think about how you want to spend your golden years. Preparing for retirement ensures that you are set financially and able to enjoy yourself once you stop working.


With that said, take a look at the information below to learn how to prepare for retirement:


Save 15% of Your Income


Saving 15% of your gross income towards retirement is a great way to prepare yourself financially. Put the funds into a growth stock mutual fund, like your employer’s 401k or a Roth IRA. Roth IRAs are a good option because the money that you invest accumulates tax-free. You won't get taxed when you take your money out for retirement.


As the years go on, you should continually invest in your accounts while you also work on other financial obligations. The objective is to not only build your finances, but also reduce your debt.


Pay Off All of Your Debt


To piggyback off of the tip above, it’s essential to pay off your debt. Preparing for retirement includes making sure that you don't have a financial burden looming over you after retirement. Therefore, as you're saving for the future, work on eliminating your debt. This includes your mortgage.


If you pay off your house a few years before retirement, it allows you to boost the amount of money you put towards retirement savings. This is the quickest way to build your retirement fund. Once your income changes after retirement, it'll be a lot harder to maintain your money without continually pulling funds from your retirement accounts.


Downside Your Home


Your home is one of your biggest assets. However, it can also interrupt your retirement fund. It's difficult to let go of such a meaningful possession. But if a hefty mortgage is keeping you from effectively preparing for retirement, it's a good idea to consider a more affordable mortgage.


Bring in Extra Income


One of the best ways to prepare for retirement is to make sure that your nest egg is as large as possible. To do so, consider bringing in more money. You don't have to burn yourself out and never take time off as your building your retirement savings.


If you're ready to escape the workforce, but don't want to forfeit vacations, picking up side work is the best way to compromise.


This is also a good option if hobbies aren’t important, but building income is your main goal. A side hustle can grow your retirement savings faster and prevent you from using your main income for extra expenses.


Think Long Term


One of the biggest obstacles that people face when preparing for retirement is the stress and anxiety of financial uncertainty. The truth is, things happen. At some point while you're saving for retirement, you might lose income, get sick, or face some other financial obstacle.


During these times, it’s tempting to withdraw money from your 401k to substitute for your lack of money. However, you shouldn't use your retirement savings as a backup plan for life emergencies.


It's a good idea to also have a substantial rainy day fund set aside for those unexpected occurrences. Investing in your future is a long-term ordeal, and you should treat it as such. It takes a lot of patience to ensure that you put away the type of money you need to have a comfortable retirement.


Set Retirement Goals


Writing your goals down will help you prepare for retirement. If you have something to look forward to and a goal to reach, it'll motivate you to stay on track.


What do you want? Do you want to buy a retirement home in Florida? Do you want an RV? Whatever it is, write it down.


Doing these steps will give you a general idea of what type of money you will need once your working days are over.


Consider What You Already Have


You may already have things at your disposal to help you pay for the future. Preparing for retirement becomes easier when you take inventory of your current finances and valuables.


For example, if there are things in your home that you can sell, it's a great way to jump-start the money in your retirement savings. If you have $25,000 in your standard savings account, consider putting $5,000 towards the foundation of your retirement. Doing so will help you get the ball rolling, so you don't continue to wait until a later date to secure your financial future.


Use the Help of a Financial Advisor


Retirement planning isn't always easy. Therefore, it's a good idea to enlist a professional to help you. Doing so allows you to have someone on your side to educate you and hold you accountable.


If you're looking for retirement income planning assistance, follow the highlighted link to learn more about Philip James Financial.


Preparing for Retirement: Set Your Financial Future


Preparing for retirement is essential to establishing your financial future. As you live out the rest of your life, you want to be comfortable. The best way to do that is to ensure that you are ready when retirement rolls around.


If this article was helpful, feel free to read more from our website. We post informative content relating to loans, insurance, credit cards, and more. You're sure to learn something that you didn't know before.


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