I want to retire comfortably: 9 steps to take now to get there

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Preparing for a comfortable retirement depends on many factors, including age, income and lifestyle. While there’s no one answer for a comfortable retirement, there are some general rules that can help you save for retirement and ensure the money saved lasts through your retirement years.

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Here are nine steps you can take right now to start preparing for a comfortable and happy retirement.

Create a financial plan with a financial advisor

If you’re not sure how much you need to save for retirement or are unsure of your retirement vision, it’s never too late (or too early) to meet with a financial advisor and create a financial plan together. . .

“A financial plan can define your retirement goals, incorporate what you’ve saved for retirement so far, track how those retirement funds will grow in the future, and let you know if you need to save more to reach your goals,” said said Lorrie Delk Walker, financial advisor at Allen & Company of Florida.

Repay debts

If you have outstanding debts, such as a mortgage or credit cards, pay off the entire balance as soon as possible.

“The interest you’re paying each month is probably outpacing the growth of your investments right now, so you’re backing off if you’re in debt,” Delk Walker said.

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Store savings in money market accounts

John Campbell, General Manager of the Central Region of American bank Private Wealth Managementrecommends keeping three to five years of savings in cash or in a short-term vehicle like CDs or money market accounts.

Invest in bonds

“During your early retirement years, you may want to think about Treasury-issued securities that are not subject to interest rate fluctuations, such as Series I Savings Bonds and Treasury Protected Securities. Against Inflation (TIPS),” Campbell said.

Create tax-diverse revenue streams

Tax-diversified sources of income for people planning a comfortable retirement should include a mix of before- and after-tax vehicles. Consider traditional 401(k) and/or IRA accounts, as well as a Roth 401(k) and/or Roth IRA, to avoid paying additional taxes when you receive distributions.

Additionally, if you are currently employed and your employer offers a retirement plan, Delk Walker recommends contributing to that retirement plan to the point of maximizing any correspondence with the company. Set a goal to increase your contribution each year until you reach the maximum.

Open an HSA

Do you have a Health Savings Account (HSA)? Campbell said an HSA can now be used as a retirement account. An HSA uses pre-tax dollars, so you can take the account with you if you quit your job and it will grow tax-free.

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Protect and preserve your assets

Health care is one of the biggest expenses in retirement. Most Americans must work until at least age 65 when eligible for Medicare. While part of your vision for a comfortable retirement should focus on caring for and maintaining your health, an unexpected health care bill can take a significant chunk out of a retiree’s income or savings. In some cases, this may cause retirees to sell their assets to compensate for the financial loss.

Rather than selling your assets, Campbell recommends considering getting a long-term care policy, hybrid policy, or permanent life insurance as your financing vehicle. (If you’re considering long-term care insurance, Delk Walker advised talking to a professional about its merits before deciding if it’s right for you.)

“Many policies allow after-tax contributions, and you can add a long-term care rider. These policies pay a death benefit, but the cash value belongs to you, and some policies pay tax-deferred interest or dividends,” Campbell said.

There is good news for those who decide to delay their retirement. In the event that a retiree chooses to delay retirement until age 70, they will receive the maximum payment available and health insurance coverage.

Read books on retirement

Delk Walker recommends retirees read a copy of “How to Retire the Cheapskate Way” by Jeff Yeager. By reading retirement books, retirees can open their eyes to other retirement scenarios and possibilities.

“Often, financial experts identify a specific amount of money needed to retire. I’ve heard of $1 million and $2.3 million. But the truth is, retirement is different for everyone. world and you can choose to make lifestyle changes that allow you to live more cheaply and retire earlier,” Walker said.

Be creative by cutting expenses

If you’ve already paid off some outstanding debt, now is the time to see where you can cut your spending. Can you negotiate a cheaper monthly phone bill? Cut the cord of subscription services? Getting the most out of coupons? Are there certain bills you can pay annually instead of monthly?

“Think of creative ways to reduce your expenses, such as increasing your deductible on home and auto insurance, as well as other expense-saving measures,” Campbell said. “As the old saying goes, adjusted for inflation, a dollar saved is a dollar earned.”

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About the Author

Heather Taylor is Senior Financial Writer for GOBankingRates. She is also the editor and brand mascot enthusiast for PopIcon, Advertising Week’s blog dedicated to brand mascots. She has been featured on HelloGiggles, Business Insider, The Story Exchange, Brit + Co, Thrive Global and other outlets.

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