What To Do For Retirement Before It’s Too Late

What To Do For Retirement Before It’s Too Late

July 14, 2016

Retirement should be relaxing and enjoyable, but if you’re not prepared, money might be tighter than you think.

Everyone looks forward to retirement. It is a time when you can pursue what makes you truly happy, and spend a lot of quality time with your family and friends. According to the United States Department of Labor, less than half of the workers in this country have actually crunched the numbers to see how much money they would need to save before they can comfortably retire. On top of the fact that most people aren’t actively planning, the average American will spend at least 20 years in retirement.

Make a Plan and Stick To It

Meet with a financial advisor and create a retirement strategy for saving your earnings. Be strict with yourself. Do not break your plan even for one week. The earlier you start, the better off you will be when it is time for you to retire. The United States Department of Labor estimates that you will need around 70 percent of your preretirement earnings once you retire to maintain your current lifestyle.

Contribute to Employer 401(k) Plans

These plans are perfect for retirement. They don’t get taxed until they are cashed, so they grow in an account for years. Also, depending on your plan your employer may have to match your contributions to your account, so that you are putting back double. Despite these great plans in 2012 over 30 percent of private industry workers with access to 401(k) plans did not contribute to them. Do not let these opportunities pass you by.

Other Investment Options

Younger people tend to go for higher risk and higher reward investments. If they lose a lot of money they still have time to recover their losses before retiring. Conversely, older people tend to invest in lower risk investments that have steady returns. Let’s explore some more of these types of investment options that offer investors low risk and a steady return.

-Annuities – These investments are insurance products that provide the holder with a steady source of income. They pay out either monthly, quarterly, or in one annual lump-sum every year of your retirement.

-Bonds – These investments are debt securities. In this case you are lending money, generally to a corporation or government, in the exchange of interest payments and the future repayment of the bond’s face value. These types of investments are very stable and consistent, perfect for retirement and a steady source of income.

-Direct Reinvestment Plans – These plans are beneficial because they allow the investor the option to reinvest their cash dividends in more shares or fractions of shares on the date payment is due. This is a great way to grow wealth and manage your current stock options.

Meet with A Financial Advisor and Create an Investment Plan

This is a very important step in ensuring you will be comfortable in retirement, and it is never to late to meet with an advisor. Granted if you invest while you are young and hire an advisor to manage and grow your investments, by the time you retire you should have a nice chunk of change, however, it is never too late to meet with a financial advisor. Obviously, you need to find the right advisor for your needs, and formulate the best possible plan for the long-term with them.

Retirement should be enjoyed to the fullest, you’ve worked hard now it is time to relax. It is never too early or too late in the game to be thinking and planning ways to invest your income in ways that will be more beneficial to your future retirement. Famous playwright and American icon Tennessee Williams said, “You can be young without money, but you can’t be old without it.” Contact us for more information on investments and retirement.