Have you been planning for your retirement in Phoenix, AZ? You should be. It’s never too early to learn about how to plan for retirement and take proactive steps to maximize your security when you’re ready to stop working. Here are the top five things to do before retirement to ensure comfort and financial wellbeing in your golden years.
Stick to your savings goals
When it comes to saving for retirement, you can never save too much. Remember that it’s never too late to start saving—every penny helps. Don’t worry if you have to start small. Set manageable goals and try to increase your savings each month.
Calculate how much you’ll need to live comfortably
Anticipating your future financial needs is necessary in learning how to plan for retirement in Phoenix, AZ. As a general rule, most retirees need between 70 to 90 percent of their pre-retirement income to have a similar standard of living all throughout their retirement. Be a little liberal with your estimates, because you want to have a good buffer to be able to fully take part in all the great activities that retired life has to offer.
Contribute to your retirement account
If you’re working for an employer, it’s important to start a 401(k) plan as soon as possible. It’s especially helpful to have an employer’s retirement savings plan, since your income taxes will be lower and your employer may kick in, too. The earlier you can start your 401(k) the better, since compound interest and tax deferrals help your account grow over time.
Wait to touch your retirement savings
You lose principal and interest if you withdraw from your retirement account before it’s time. If you withdraw from your 401(k) before you turn 59.5 years old, the IRS imposes a penalty fine of 10 percent on the amount you withdraw, except in some special circumstances. Even if you change jobs, it’s recommended to leave your retirement plan as is unless your new employer sets you up with a new plan.
Create and contribute to an IRA
One of the best things you can do to prepare for retirement is create an individual retirement account (IRA). You can contribute up to $6,000 each year or more if you’re 50 or older. You can start an IRA with much less than many other retirement plans, plus IRAs allow you to choose your tax advantage. You can choose between a traditional or a Roth IRA, and each has its own tax benefits. It’s an easy way to save, and your investment will grow substantially the sooner you start.
Learning how to plan for retirement in Phoenix, AZ is one of the best skills to develop early in adulthood. No matter when you plan to retire, it’s crucial to have a trusted fiduciary advisor on your side to help you make a plan that you can stick to. Contact Fiduciary Advisors, LTD. today to learn more about the proactive steps we can help you take today to ensure financial security in retirement.