know what the picture is supposed to look like: You spend your whole
life on the job, working toward that magical retirement age when your
golden years begin — that era when you’re rewarded for your life’s
labors with the time and resources to pursue your passions, whether it
be traveling, spending time with your grandchildren, or pursuing a
favorite hobby. But with a rocky economy and the cumulative changes over
the last generation, that picture might not be so clear.
matter how near or distant your retirement may be, there are more than a
few simple things you can do to prevent your retirement picture from
blurring into something unrecognizable. Consider these basic tips to see
to it that your retirement is spent doing what you love, and ensure
your retirement picture develops the way you’ve always hoped.
1. Set your retirement goals: As
with everything you’ve worked for in your life, a secure retirement is a
goal you must aim to achieve. Think about what you want your retirement
picture to look like. Does it involve living in a paid-off home or
relocating to a house on the beach? Would you like to spend your money
on yourself, donate to charities, or provide for your children? Consider
your retirement picture and what it will take to make it all come
together. Be realistic about your goals, and start making some
sacrifices now so you don’t have to make them when you’re 80 years old.
2. Start planning now: Whether
you’ve just begun your professional career or are looking at retiring
in five years, start taking the steps to prepare now. If you’re on the
younger side, establish an IRA or participate in your employer-sponsored
401(k), and fund these retirement vehicles with as much as you can. If
your retirement is in the not-too-distant future, contribute the maximum
to your retirement accounts, and start modifying your portfolio from
growth-oriented products to distribution-focused products. This may mean
that you’ll have to readjust your spending and savings lifestyle today,
but it will pay off in the years to come.
3. Reevaluate your life expectancy: It’s
no secret that the average American is living longer than ever, thanks
to tremendous medical advancements, but you might be surprised by just
how long your retirement years could last, and consequently, how long
your retirement funds must
last. According to the Society of Actuaries, a 65-year-old man has a 41
percent chance of living to age 85, and a 20 percent chance of
surviving to age 90. A 65-year-old woman has even better odds. She has a
53 percent chance of living to age 85, and an impressive 32 percent
chance of reaching age 90. With these statistics in mind, ramping up
your savings is more crucial than ever.
4. Determine your Social Security benefits:
Did you know the longer you delay retirement, the larger your Social
Security checks grow? While you can officially start drawing funds at
age 62, if you hold off until age 70, you’ll double your benefit amount.
Even if you wait until age 66, your Social Security checks will grow by
one-third. While working past age 65 might not appeal to you, the
higher payout most certainly should. There are many more strategies to
get the most from Social Security, especially if you’re married. To
explore your options and determine when you’ll begin to draw Social
Security benefits, visit www.SSA.gov. They even have an online retirement estimator to help guide your decision.
5. Work with a trusted advisor:
If you really want to get the best out of your retirement plan, it’s
best to place it in the hands of a capable retirement specialist. A good
advisor can talk you through the process, recommend appropriate
investment tools, offer practical advice on savings, and what’s more,
keep an eye on your retirement portfolio. Ask friends or colleagues for
some trusted advisors, and then get to work.