There’s an ancient Chinese proverb that goes something like this: “The best time to plant a tree was 20 years ago. The next best time is today.”
What’s the point? Even if you only have a simple retirement plan (or no plan at all), it’s never too late to change. And even if retirement is still decades away, the best time to start saving for retirement is right now.
Do you feel overwhelmed at the thought of how to plan for retirement? Here are four retirement planning tips to consider.
1. Take Advantage of Retirement Accounts
The best place to begin a simple retirement plan is by considering what your employer offers.
For example, are you signed up for a traditional 401(k) plan? If so, are you making regular contributions to it? If your employer offers to match plan contributions, take full advantage of that — it’s essentially “free money.”
To build your nest egg, you might also consider opening a traditional or Roth IRA. Not sure which types of accounts are best for you? Talk to an advisor at Bogartwealth.com for expert retirement planning services.
2. Automate Your Savings
If you own your own business, you’re likely familiar with the concept of “paying yourself first.” Even if you’re not a business owner, the same rule applies to saving for retirement.
Make it easier to grow your nest egg by signing up for automatic contributions to your retirement accounts. Set aside a portion of each paycheck for your 401(k) or enroll in automatic transfers into your IRA account.
Once you set it and forget it, you can focus on your immediate needs without worrying about your retirement savings.
3. Plan Where You’ll Live
This is incredibly important but often overlooked in the retirement planning process. Ask yourself questions such as:
- Will you keep your current house, or will you downsize into a townhome or condo?
- Do you want to keep living in your city/town, or would you like to relocate?
- Are you interested in a second home to live in seasonally?
- Do you plan to live closer to your children or grandchildren?
There are no right or wrong answers here, but it’s worth sitting down to envision what you want out of your retirement. A beachfront condo in Florida will require a much bigger retirement portfolio than a paid-off cottage in Tennessee.
4. Consider Delaying Social Security
The traditional age for retirement is 65, and you can even start pulling Social Security as young as 62. But did you know that the longer you wait, the higher your Social Security payments will be?
For every year that you delay retirement, your monthly benefits will grow by 8%. In addition, delaying retirement also means delaying tapping into your nest egg. That way, when you finally do retire, you’ll have a lot more money to play with.
Get Started Today With These Retirement Planning Tips
If you’ve been wondering when to start planning for retirement, the answer is: right now. Even if you start small, those savings will add up over the years and get you one step closer to a comfortable retirement.
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