6 Steps For Retiring The Right Way

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Retiring the Right Way

Believe it or not, planning for retirement is a life long commitment.    To do it right you will need you entire life time to save enough money to retire; unless, of course, you are lucky enough to inherit wealth.

We all want financial security, but don’t always know how to go about getting it.   Achieving financial security is not just for those who earn high salaries.   Anyone can achieve wealth, it just takes a commitment from you.  Let’s learn more.

Steps to Retiring The Right Way

Step #1  – Start Early

  • We’ve all heard it, but don’t always do it.
  • When you start your very first job you should start saving for the day you will work your last job.
  • Start out easy on yourself, make it a commitment to invest 10% of your monthly take-home pay.
  • Then when you get used to that level of investing, bump it up to 25%.
  • You will be amazed how much you don’t need the money.

Step # 2 – Max Out

  • Retiring the Right WayContribute as much as you possibly can to retirement accounts.
  • The power of compounding will benefit you in the long run.
  • If your employer matches your 401k plan contributions, you are getting free money.
  • Learn to live below your means, so that you can dump extra money into your 401k plan.
  • You will surprise yourself on how much you don’t miss the money you are investing into your retirement account.

Step # 3 – Do An IRA

  • Roth IRA contributions are made with money after you’ve paid taxes on it.
  • At retirement, your Roth IRA withdrawals are made tax-free
  • Traditional IRA contributions are made with money before you’ve paid taxes on it.
  • So at retirement, you will have to pay taxes on your Traditional IRA withdrawals.
  • The benefit of a Traditional IRA withdrawal is that at retirement you should be in a lower tax bracket, so you will be paying lower taxes.

Step #4 – Protect It

  • Protect your investments.
  • Protect your investments by your tax strategies.
  • Protect your investments by the investment choices you make.
  • Choosing investments that are too aggressive means wide swings; high ups but also low downs.
  • Protect your investments by going middle of the road, not too aggressive not too conservative.   This approach would be a called moderate investment selection.

Step #5 – Preserve It

  • You’ve worked hard for your money.
  • Help preserve your wealth by making the proper investment choices.
  • If you are near your last working years, you may consider investing more conservatively.
  • The diversification of your portfolio is more important as you are nearing the retirement years.
  • Diversify not only your stock and bond selections, but you  may also consider diversifying into certificates of deposits and annuities.

Step # 6 – Financial Check Ups

  • Annually, check all of your investment accounts.
  • Check the performance.
  • Check the fees
  • Many investment accounts have administration fees, the 12b-1 fees or loads on mutual funds.
  • Check your accounts when you have life changing events such as; a birth, a death, marriage, children, divorce, poor health, new home purchases and college planning for your children.
  • Life changing events may require some modifications in how you are investing, protecting and preserving your investments.

Prepare for your retirement the right way the first time, during your working years.   You don’t get a 2nd chance; well you do and that’s called working during your retirement years.

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