Retirement Planning Tips
- Set lifestyle goals for retirement: What do you want your retirement to look like? Do you want to have resources to travel, own a second home, work part-time, or spend time caring for grandkids? You will need more money for certain goals and less for others.
- Determine how much money you will need for the lifestyle goals you choose. The rule of thumb is that you'll need 70-80% of today's income to maintain your lifestyle in retirement.
- Talk to others who have retired in last five years. Ask for their advice on what they did right and what they would do differently.
- Start saving early. You can't make up for lost time when it comes to compounding interest. Small amounts invested over a long time will always give you more for retirement than large amounts saved over a shorter period of time.
- Make it automatic. You've set a goal…now make it happen by having automatic deductions from your paycheck or checking account put into an IRA or other tax advantaged account. You don't miss what you don't see.
- Maximize savings in employer plans. Many of these offer matching contributions, tax-deferred growth and use pre-tax dollars, reducing your taxable income and therefore, your income tax.
- Withdraw from taxable accounts first. Upon retirement, use the money in your taxable accounts first and let your tax deferred accounts continue growing.
- Join AARP. You may feel too young to be a "senior citizen" But, the AARP provides great perks and discounts to anyone 50 years or better. So take advantage of them.
- Consider relocating. Some areas of the country just have a lower cost of living. You can make your dollars go further in those locations and you might enjoy the change of scenery!