12 Financial Planning Tips For A Smooth Retirement


12 Financial Planning Tips For A Smooth Retirement

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Retirement represents a well-deserved period of any individual’s life, where the long-term effort finally pays off. But to fully enjoy this experience, without worries or regrets, needs some careful strategy and hard work. If you managed to work this out already, thumbs up to you and to your practical thinking.

However, if you haven’t managed to plan anything related to your retirement, this article is a great starting point. Financially planning your retirement requires some help and understatement of how the financial processes might work. Here we made a list of 12 things worth remembering when you initiate to plan for your retirement.

  1. Maximize your 401(k) – Since 2021, the IRS has raised the numbers in the maximum contribution level, to $19,500 from $19,000 in 2020. Of course, if you have an Individual Retirement Account(IRA), the maximum sum you can add is just $6,000/year. Even so, you can make additional contributions of $1,000/year if you are aged 50 or older.
  2. Employer matching – Don’t turn down your employer’s offer of matching retirement funds.
  3. Seek professional help – In a 2014 survey, 70% of 401(k) participants were more confident in making 401(k) investment decisions, thanks to professional help.
  4. Learn about investment fees – Making small changes in matters of financial decisions can really turn things around for you. Rather than paying enormous fees, you can opt for an index fund, instead of an actively managed fund. You can get your fees down to just 15%, so it’s worth it.
  5. Pay off your debt – If you’re paying down high-interest debt too slowly, you lose money in the process, so reconsider if you want the power of compound growth to work in your favor.
  6. Decide your retirement number – That pretty number you have in your mind for retiring, keep it alive! Just don’t forget that in 2045, it might be another sum, assuming 3% annual inflation.
  7. Know your Social Security benefits – If you want to estimate your retirement benefits, you can check the calculator on the federal government’s Social Security website.
  8. Ask for opinions from other retirees – Along with professional advice, it would be a really good idea to exchange opinions with some retirees that have entered their golden years successfully.
  9. Start early – People who are inspired enough to start on their retirement savings sooner will have to benefit by the time they hit 60.
  10. Don’t believe it’s too late – Even by the age of 50, it’s not too late. If you manage to save $14,400/year and delay your retirement by the age of 67, you’ll have $295,000(assuming an 8% annual return) which is a great amount of money in a short period.
  11. Get a second opinion – We strongly recommend seeing more than just one financial planner. Two opinions are better than just one.
  12. Asset allocation – Especially, in this case, diverse asset classes can provide you what you need for a smoother ride.

If you enjoyed reading this article, we also recommend you: Do You Plan on Retiring Early? Here Are 10 Affordable Cities That May Be Perfect for You!

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