10 Ways to Prepare For Retirement

10 Ways to Prepare For Retirement

Regardless of your age, the thought of not having to work, but still enjoying a great quality of life is probably quite appealing. Retirement sneaks up on you as each year goes by faster and faster. Recent statistics reflect that a majority of women define financial success as a financially secure retirement, yet taking the steps to properly plan overwhelms them and they end up doing nothing.

Unfortunately, most people (both men and women) aren’t adequately prepared for retirement, so when the time comes, they find themselves frustrated and unhappy with the new state of their lifestyle. That doesn’t have to be the case for you.

The key to enjoying retirement is preparation. Working with a wealth management firm like UWM will allow you to enjoy the process and set yourself up for success during the later years.

While this is not a comprehensive list, here are 10 Ways to Prepare For Retirement:

  1. Save. If you don’t have a savings plan, start one today. You don’t have to wait until you have an extravagant amount of money – you can start with as little as $1. The sooner you start, the more time you have to increase your savings.
  2. Understand Your Retirement Needs. Experts estimate you will need approximately 80-90% of your preretirement income. Make a plan beforehand so you aren’t left trying to figure it out when it’s time to retire.
  3. Contribute to your 401(k). Maximize your contribution. There are many benefits to this including lower taxes, company matches, compounded returns, and tax deferrals.
  4. Get information on your pension plan. Check to see if you are covered on your employers’ pension plan. Ask for a statement to see what your benefits are worth. You can also find out if you are entitled to benefits from your spouse’s pension plan as well.
  5. Invest wisely. Know how your savings and pension plans are invested – learn about the options and ask questions. Diversify your portfolio to reduce risk and improve return.
  6. Leave your retirement savings alone. Withdrawing your retirement savings now means you lose the ability for your money to earn tax-deferred compounded returns. Keep in mind that you will owe federal and state income taxes as well as a 10% penalty if you’re younger than 59 ½. You could lose upwards of 50% to taxes for early withdrawals! If changing jobs, consider either rolling the funds into an IRA or into your new employer’s 401k plans.
  7. Put money into IRA. You can make annual contributions of up to $5500 ($6500 if you are age 50+) into an IRA. Consult with a financial advisor to see which type, Roth or Traditional IRA, is right for you.
  8. Research your Social Security benefits. Social Security pays benefits that are about equal to 40% of what you earn preretirement. There are a myriad of filing strategies, whether you are currently married, divorced, widowed, or never married—maximizing your social security benefit could be one of the smartest things you could do for yourself.
  9. Determine a Budget. Your budget should take into consideration emergency expenses, as well as provisions for achieving personal retirement goals.
  10. Work with a Wealth Management Professional or Financial Planner. Working with a reputable wealth management firm will help you cover all the bases in terms of preparing for your retirement.

Retirement doesn’t have to be overwhelming or stressful. With proper planning, you can enjoy the process and look forward to the golden years!

Contact us today to set up a complimentary consultation.