If 20-somethings spent as much time planning their retirements as they do planning their weddings, vacations, or car purchases – oh what a financially secure world we would live in! Fifty years ago, when Baby-Boomers were in their 20’s, they had more “important” things to do also – like hitching rides to Woodstock, protesting the war, and changing the world in general. Who had time to come up with a savings plan?
Today, Baby Boomers are more than ready to plan their retirements. But the game has changed from one of saving and investing, to one of conserving. Now you have to plan your post-retirement income based on what you’ve already accumulated and incorporate strategies to pay for big ticket expenditures like health care costs, long-term care, and the possibility of a very long life. Here are some savvy tips for things you can do right now to help pave the way for a successful retirement.
- While you’re working, make sure you reduce your large debts (like mortgages and credit cards), to lower your monthly payments in retirement.
- Know your rights – tax rules allow workers over the age of 50 to increase contributions to 401(k)s and retirement accounts.
- Look into long-term care insurance, or put money away yourself, to ensure you and your spouse will have the care you need in advanced old age (some annuities come with long-term care options).
- This year, 2013, “catch-up” contributions are allowed up to $6,500 for traditional IRAs – so sock it away while you can!
- Planning your income means more than figuring out how to stretch your savings. One thing you can do is consult with a financial planning professional to determine when it would be best to take your Social Security benefits. The answer is different depending on your specific situation (or we’d tell you right now).
– The Savvy Investor