Without a solid plan, your retirement dreams could be at risk.

Planning is a crucial aspect of retirement. Without it, you might not be able to afford the lifestyle you envisioned. So, ensure your retirement isn’t ruined by following the six saving strategies below.

1. Define Your Goals

Begin planning for retirement by defining exactly what you want it to look like. This means getting descriptive with it by deciding on the age, location, and lifestyle you envision.

To begin this process, ask yourself questions like, ‘Will I be living with family or in a nursing home?’,‘ How often will I travel?’ and ‘What do I see my hobbies being?’.

Only once you’ve asked questions like these, and decided on the key aspects, will you be ready to start figuring out how much you’ll need to save to achieve it.

2. Begin Budgeting Early

The earlier you begin thinking about retirement, the better it will be for you in the long run since it will give your money more time to grow. So, start taking advantage of compound interest by either opening a retirement account or exploring any employer’s contribution plans you have access to.

3. Consider Investing

Investing can help you build a substantial retirement fund if it is done right. To help build a hefty fund, consider spreading your investments across different asset classes (such as stocks and bonds) to minimize risk while still building wealth.

However,  young investors might want to consider being more aggressive with their investment decisions as they will have more time to make up for any potential losses.

4. Explore Savings Plans

There are three main types of savings accounts and since each one of these offers different benefits, it is up to you to determine which one is best. For those that have an employer-sponsored plan, we highly recommend saving this way seeing as they often match contributions. This match feature tends to speed up savings without any impact on immediate living needs.

IRA’s, and Roth IRA’s are the other most common retirement plans. Both of these accounts offer tax advantages, although the advantages will be observed at different times. For example, Roth IRA’s allow for tax-free withdrawals in retirement while IRA’s do not, so be sure to consider what will make the most sense for you now and in the future. .

5. Consider Healthcare Costs

Health care tends to be one of the most significant expenses in retirement. To gauge how much money you’ll need for medical costs, take into consideration your current health and family history. These two factors need to be taken into consideration as they will likely dictate the level of care you’ll need (for example any medication, medical equipment, or nursing care).

To budget for healthcare costs in retirement, consider purchasing long-term care insurance or starting a Health Savings Account to create a dedicated medical fund for your golden years.

6. Explore Potential Benefits

You might be eligible to receive additional benefits in your retirement years from things like social security. Although the amounts that people receive varies, these benefits could supplement your retirement income. If eligible, it means you might actually need less than you originally thought to retire comfortably. Just note that these payments are based on your earnings history, and delaying receiving them will increase your monthly payout in the long run so it is best to speak with a financial professional who can assess your circumstances to determine where your payments will be at.

So, if you are unsure how much money you’ll need to retire and would like help forming a financial plan for it, speak with us at 407-328-5001 or send us an email here.

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