happy retirement

While most Americans think about retirement, too few actually prepare for it. Just under half of all workers have not calculated how much money they will need to retire—while many people who have access to employer-sponsored savings accounts, like a 401(k), never make any contributions. Whether you are just starting to think about your golden years or are looking to reinforce whichever plan you already have in place, here are ten tips to help you better prepare for retirement: 

1. Start Saving and Keep Saving, No Matter Your Age

This is among the simplest tips recommended by the United States Department of Labor. No matter how close to retirement you are, start saving—and once you have started, do not stop! Start making small, monthly deposits into a savings or individual retirement account, if you do not already, and increase your goals whenever you can.

The most important take-away here is to start saving and keeping saving.

2. Know What You’re Getting Into

Retirement can be full of surprises—and you will want to minimize the bad ones. Consider meeting with a wealth management attorney to discuss your retirement goals and needs. Do you know what sort of lifestyle you want to lead in retirement? Have you set aside money for vacations, extravagances, and necessary expenses?

In general, you will need to keep at least 70-90% of your pre-retirement income to retain the same quality of life you have while working. If you’re planning to live off Social Security or another single source of income, you may have to reconsider your needs.

3. Explore Your Employer’s Options

If you are working full-time and your employer offers a 401(k) or other retirement savings plan, sign up. Not only does participating in a 401(k) lower your taxes, but many companies will match contributions, too.

4. Explain the Benefits to Your Employer

If your employer does not offer a 401(k) or pension, try to broach the subject whenever you can. While some employers may mistakenly believe that retirement plans are a net drain on their income, they can actually offer the same fantastic tax incentives for businesses as they do for individuals.

5. Put Money Into an Individual Retirement Account

An individual retirement account, or IRA, lets your deposit up to $6,000 per year—if you are over the age of 50, you can contribute even more. There are several different types of IRAs available; which one is best for you depends on your financial circumstances, age, and long-term aspirations.

6. Consider Your Social Security Benefits

You likely already know that your regular earnings impact your Social Security benefits later in life. But did you know that the age at which you retire can also affect your Social Security benefits? If you retire too early, you may receive reduced payments for the rest of your life; if you wait several years longer, you may be able to increase your benefits.

7. Calculate Your Net Worth

If you have not done so already, calculate your net worth: the sum of your assets, be they checking accounts, securities, properties, or personal possessions. What will you need in retirement? Which assets or properties can help you sustain your current quality of life, and which could you sacrifice to improve it?

8. Think About What You’re Looking Forward to in Retirement

Speaking of calculations, think about what you want to do once you retire—regardless of whether or not you are looking forward to hanging up your hat or turning in your badge. Considering your goals and dreams can help you determine how much you are liable to spend, or want to spend, as a retiree on top of day-to-day subsistence.

9. Talk to Retirees

If you have coworkers who are heading into retirement, or colleagues who have already retired, you may want to turn to them for advice. They can give you a realistic perspective on which strategies worked and which did not.

10. Create a Comprehensive Estate Plan

You can get started on an estate plan at any age. While you may not think of estate planning as an integral aspect of retirement planning, the two topics have considerable overlap: if you are planning to establish a trust to leave a profitable legacy for your children or other loved ones, then you may need to allocate retirement funds and assets differently than you already have.

Contact Us Today

No matter which stage of retirement planning you are at, it is never too late to start. An experienced Arkansas wealth management attorney may be able to assist you in better managing your finances, both in the present and for the future. Don’t let a pleasant retirement elude you: send us a message online or call us today.

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Carrie Russom Quraishi, JD, CAPP
Carrie provides personalized estate planning and wealth management services to clients in AR, TX & TN.
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