Retirement is a goal for many Americans. Ideally, after years of devoting themselves to work, an individual will be able to transition comfortably into enjoying their post-employment life. However, to achieve this goal, it is critical that potential retirees take steps today to prepare for their future. While you may have made some preparations, there are measures you can take to make your retirement even more successful. Here are five ways to improve your retirement plan:
1. Start Saving
Although you may have contributed some funds to your retirement accounts and set aside money for your household expenses now is the time to remain diligent about making regular contributions to both of these resources. Once you have retired, you may have less capital available. By having a well-funded retirement and strong savings, you will help ensure that you can cover significant post-retirement expenses with your available means.
2. Take Advantage of Employer Matching and Catch Up Provisions
If you have a retirement saving account through your job and are fortunate enough to have an employer who offers to match your contributions you should be taking full advantage of this benefit. Add up to the matching limit if you are able. If making a maximum contribution is not feasible, be sure to put as much as you can towards the account.
If you are 50 or older, you can catch up on your retirement savings through additional payments. If making extra contributions to strengthen the account value is possible, make every effort to do so. Even if you cannot make the maximum permitted extra payments, putting more towards retirement can mean having a significantly larger benefit down the road.
3. Downsize and Save the Difference
Nearing retirement can mean not needing the same assets you did earlier in your life. For instance, you may have required a larger home which was close to certain schools because of your children. If your children are grown, and out of the house, this asset may not be necessary. This may be a good time to think about selling the family house and moving into something smaller and less expensive. You take any profit you earn and your household expense savings and put them into your emergency or a retirement fund.
4. Prepare a Budget
Planning for a successful retirement will require being truly ready to live within your means. Create a realistic budget which accurately accounts for your living expenses while allowing you to enjoy leisure activities and contribute to savings. By being realistic about what to expect, you can assess how much you will require to retire comfortably.
Adjust Your Timeline as Needed
After examining your savings and anticipated budget, you may conclude that continuing to work is the best option for you. Evaluate whether an additional few years on the job will have a substantial impact on your retirement savings. Taking a little more time could allow you to catch up on your 401(k) contributions and increase your overall retirement savings. Additionally, for those who plan on drawing Social Security income, waiting to draw your benefit until age 70 could mean thousands of dollars more per year.
We have experience with retirement planning and can provide you with the guidance you need to prepare for and improve your retirement resources. Please contact us online or by phone if we may be of assistance.