What Will Retirement Look Like for You? Fast Forward to Your Retirement Years
It’s extremely easy to delay retirement planning until those years are just around the corner. To those of us in our 30s, 40s, even 50s, retirement can seem like another lifetime and we always seem to think there will just be enough money waiting for us at retirement. But smart decisions made sooner rather than later can make the difference between pinching pennies to get by and spending retirement years traveling, dining and reveling in resort life.
No one knows when their time will be up, meaning retirement could span a few years to a few decades. Not many of us strive to see ourselves as older with possible health or financial issues, or even job loss. But avoiding a glimpse into the future can be problematic. It’s advisable to take a realistic look at how your retirement will be based on your current financial choices and overall situation.
It’s important when you look to the future and ask yourself questions such as: Do you want to retire at a specific age? Do you have a plan in case you lose your job sooner than expected? Does your family have history of a debilitating illness? Do you have dreams for how you want to spend your retirement years?
According to a recent study, three out of five people in the baby boomer generation believe they could work until age 65 and still not have enough to live comfortably in retirement. Even fewer people have spent time actually calculating their specific retirement needs. It is in reality, more terrifying not to take a good look into the future to see what those years look like now.
You can help change the course of your retirement. Take a look at how much you’re contributing to your 401k at work. Could you afford another 1% per month? If you do the calculations, you’ll find this additional amount saved may add up to the cost of an evening out. If calculate the difference between an additional one percent and your current contribution over multiple years, you might be astounded at the difference it will make in your retirement dollars by the time you get there.
Also, take full advantage of an employer 401k match, as it’s free money, so it’s a poor choice not to take full advantage of the percentage offered. If your company matches at 6 percent, contribute at least 6 percent every month. Many companies are now offering a Roth 401k and if that option is available in addition to a 401k, invest in both options. Your financial professional can determine the total percentage you should be contributing.
Plan now to avoid heading into retirement with a large mortgage or home equity loan. Have both taxable and tax-free accounts to use in retirement, so that you don’t owe taxes on everything you withdraw in retirement. Take a good look at your monthly expenses now, cut something that’s unnecessary and place that money in savings instead. Contact your financial professional to take a look into your future now and establish your personalized roadmap to retirement.
Retirement is an exciting chapter of life that should be met with ease and excitement. Countless working years should all be in preparation for retirement years so you can spend them exactly how you envision them without financial worry. Having a plan now will help to get your finances in order and provide peace of mind as you approach retirement, whether that’s soon or far in the future.
Would you like to learn how to achieve your best financial future? Simply request a call from a Bayntree financial advisor today.
Bayntree Wealth Advisors, located in Phoenix and Scottsdale, Arizona, provides comprehensive financial planning and wealth management. The Bayntree team specializes in all aspects of financial health, including retirement planning, risk management, investment advice, tax strategies, estate planning and insurance.
Bayntree does not provide specific legal or tax advice. Please consult with your tax advisor or legal professional for guidance with your individual situation.