We all have dreams about the perfect retirement, but it is so easy to let procrastination undermine the process of taking steps to achieve that dream. I am often asked about retirement planning – and one of the most common concerns is when to start. It doesn’t matter what age you are – the best time to start is NOW. It is never too late or too early to plan for your future, but the earlier you start, the better. Here are some steps you can take to help you achieve your overall objectives:
- Review your current financial situation by assessing your income and assets versus your expenses and liabilities.
- At first, determine a realistic amount to contribute regularly to your employer-sponsored qualified retirement plan, e.g., a 401(k) plan. Over time, try to maximize allowable contributions to your savings plan and take advantage of the company match, if offered.
- In 2016, you can contribute up to $5,500 into individual retirement accounts. If you are age 50 or older, you can contribute an additional $1,000. Depending on your participation in other qualified plans, contributions may be tax deductible.
- Work toward reducing your debt. Pay off large bills as soon as possible. Curb your spending to avoid taking on any new debt that could carry over into retirement.
- Consult with a qualified professional about your life, health, and disability income insurance policies to determine the amount of coverage for your current and future needs.
- Find out how much you can expect to receive in retirement from pension plans, veterans’ benefits, or Social Security. To get an estimate of your future Social Security benefits, visit www.socialsecurity.gov.
- Analyze which expenses are likely to decrease after you retire (clothing, commuting, etc.) and which are likely to increase (medical, travel, etc.), and plan accordingly.
If you adhere to your checklist, you may see your savings increase as you get closer to reaching your retirement income goals. Remember, it is never too early to start planning for your future.
There is much to learn and research about retirement planning. The library of articles and calculators on my website has lots more information and is a good place to start. Have questions? Contact me and let’s get together to start reviewing your retirement plan together.
Material discussed is meant for general illustration and/or informational purposes only, and it is not to be construed as investment, tax, or legal advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon when coordinated with individual professional advice.