With the new year comes the chance to set goals and fine-tune your financial strategies for the future. And no matter what your circumstances look like today, it’s wise to create a healthy retirement plan to support your future.
Here are five tips to get you on the road to success:
- Pay down your debt. You should pay down your debt while still working — it’s tough to eliminate debt when you’re on a fixed income. Prioritize your highest-rate debt and start from there. The more debt you can pay off today, the better off you’ll be during retirement.
- Boost your savings. For many people, most of their retirement depends on the stock market. And if the stock market takes a significant hit and you take a withdrawal from your plan balance, that’s a permanent loss that may hurt your future. Instead, work now to build your savings. It’s a good rule of thumb to save anywhere from three to six times your total monthly expenses to be safe. Set up automatic deposits from your paycheck to your savings account so you won’t be tempted to spend it.
- Practice retirement spending. A standard guideline is to be prepared to replace 80% of your income while in retirement. With that said, you may want to practice spending as though you’re a retiree. Work through your budget, track your spending and make changes, so you’re prepared with what to expect when you retire. Plus, the more you save now, the more you’ll have later.
- Review your retirement plan. It’s wise to review your retirement plan in this ever-changing world more often than you have in the past. Talk to your financial advisor to ensure your investments are allocated appropriately, so you’ll have the money you need when you’re ready to retire.
- Consider part-time work. If you’re planning to retire in 2021, you may want to take on a part-time job to earn additional income while you can. Maybe you want to consult for a few years, rent out your basement, or work at a local shop a few hours a week. Whatever you decide, part-time work allows you to put off using your retirement money until you need to.
If you don’t have a retirement plan, now’s the time to get one.
It’s never too early or too late to get your retirement plan together. Your future financial comfort depends on the efforts you make today. Contact us today to schedule an appointment. We’ll work with you to design your perfect retirement plan.