Do not wait until you are 50 to start planning.
Retirement will not save for itself.
You will need to be proactive.
According to a recent U.S. News & World Report article titled “What 50-Year-Olds Should Have Already Done to Prep for Retirement,” you cannot save for a successful retirement if you wait.
You have two options.
The first is to keep working.
The second is to settle for a lower standard of living.
What if you do have time to retire?
What should you do?
Increase contributions to retirement savings.
Your budget should include contributions to retirement.
Put as much away as you can.
As your pay increases, contribute more.
Save outside of your 401(k) or IRA.
If you put all of your eggs in one basket, you limit your options.
Your IRA or 401(k) withdrawals are taxed as ordinary income.
What can you do?
Diversify your savings to include tax-free savings, tax-deferred savings, and taxable savings.
This can also help you save more than the limits imposed on some qualified retirement accounts.
Create an emergency fund.
Your retirement funds should not be your emergency funds.
You could lose your job or incur unexpected medical expenses.
Work with an estate planning attorney.
An estate planning attorney can help you create wise tax decisions.
Doing so will also help you form and create a plan for retirement.
Create an estate plan and go over the beneficiary designations for your accounts.
Get rid of your debt.
It is hard to save and plan for the future when you have debt.
Paying off debt should be your priority.
You should not enter retirement in debt.
Use a health savings account (HSA).
Do you have a high-deductible health insurance plan?
If yes, you could participate in a health savings account.
This account has tax-free input, tax-free deferral, and tax-free output.
Understand transportation and housing costs.
Evaluate your home and automobile choices.
Mortgages and auto payments can keep you from saving for retirement.
Think of where and how you want to spend your retirement.
Knowing where you want to retire can help you know how much you need to save.
Think about what you’re going to do in retirement.
People can get bored without work.
You can live a life of meaning and value—even without your job.
There are plenty of things to consider about retirement.
Do not wait.
Reference: U.S. News & World Report (October 26, 2018) “What 50-Year-Olds Should Have Already Done to Prep for Retirement”