Making a financial plan for after your retirement is a big deal. Proper financial planning is the only way to ensure you’re set up to continue living comfortably after you stop working. Planning for retirement and learning the basics of retirement accounts isn’t something that is commonly taught in school. Eventually, when people reach adulthood, it can be a bit of a mystery and can be difficult to understand or navigate. It’s important to start planning for retirement as soon as possible. Our team is committed to helping you have a better understanding of the big picture so you can make informed choices.
You Could Need More Than You Think
As the years go on, people are living longer and longer. This means that your post-retirement life could be a lot longer than you think it will. It’s important to save as much as possible, because outliving your retirement could force you into a sticky situation. Some folks are choosing to save more upfront, while others are choosing to work longer. While you might think you can work longer now, you may not be able to when the time actually comes. It’s best to save more ahead of time and be able to retire when you’re ready without fear of not having any money.
You Must Consider Rising Health Care Costs
In addition to life spans increasing, the cost of healthcare is increasing. Even if you’re physically fit now, you may not be when you’re of retirement age. It’s good to consider what type of expenses you may have when you’re older so you can be sure to save enough to get by. It’s also good to keep in mind whether or not you will need some sort of in-home care, caregiver or assisted living when you are older.
Your 401k or IRA Contribution is Pre-Tax
The money you contribute to your retirement savings comes out pre-tax, that means you are not paying taxes on it. This is one of the reasons it’s important to utilize your retirement account for savings instead of a traditional bank account. It’s great to be saving in a traditional bank account too, but make sure you get the most out of the money that’s being saved tax-free first.
If Your Employer Matches Your Contribution, You Should Take Advantage of It
Most employers will match your contributions to a certain point. You should know how much your employer matches so you can make the most of it. That match is free money going into your retirement savings. It’s part of your benefits you receive as an employee, so take advantage of it as long as you can to get the most out of it.
Once You Hit 50 You Can Start Saving More
Once you are 50 years old, you can actually make up for lost time with your retirement. You can do this by catching up on additional contributions to your 401k plan. This can help you make up for any savings you missed in the past due to lack of employment or even just years spent contributing a low amount.
There’s a lot to know when it comes to beginning to plan for retirement. It’s important to have correct information to be able to plan accordingly for your retirement account. The highly trained professionals at Care Financial are here to help you navigate through planning for retirement.