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How To Prepare For Retirement: Tips For Whatever Your Age

Whether you're 20, 60 or somewhere in between, there are steps you can take now to prepare for a great retirement later. Having a good idea of what you want to do in your retirement, understanding the value of your assets, making regular contributions to your retirement plan and understanding your Social Security benefits are all important.

Posted: 16th August 2021 by Finance Monthly
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Consider Your Plans

What does retirement look like to you? Do you want to stay in the home that you currently live in and spend a lot of time with your grandchildren? Do you hope to move to a place that has a big population of retirees, like Florida or Arizona? Or maybe, like some American retirees, you hope to move to another country where the cost of living is lower. Maybe you want to go back to school, start that business you never had time for or go mountain climbing. 

The possibilities for retirees are greater than ever before, so don't fence yourself in with thinking about what you are supposed to do. If you don’t yet know exactly how you want retirement to look that is okay too, reading investment books can help you learn how to best save now regardless of how your retirement looks in the future. Knowing what kind of a lifestyle you want will help you with the rest of your planning. Revisit your plans every so often to see if you still envision the same kind of lifestyle or if you need to make some adjustments.

Know Your Assets

Understanding what you have, and its value is also important. For example, if you plan to sell your home and move, you should have a realistic idea of what your house is worth. You may have some assets that you do not realise are valuable. If you no longer need your life insurance policy because your children are adults, you can look into selling the policy for a life settlement. You can learn more about how to leverage those assets for you and review a policyholder's guide to modified endowment contracts.

Max Out Your Retirement Contributions

Whatever your age, you should be contributing as much as you can to a retirement fund and not buying into some common lies we tell ourselves about retirement and saving for it. This is particularly true if you have an employer-sponsored account that includes matching funds. If you are young, the money that you put away now has the potential to grow exponentially and provide you with a substantial amount of savings to retire on. If you are nearer retirement and worried about having enough saved, it might be possible for you to make larger catch-up contributions to your account.

Check Your Social Security

When you are figuring out how much you have for retirement, don't forget about Social Security. You can use a quick calculator at the federal government website to get an idea of what your payments will be. The Social Security Administration also periodically sends this information out to you.  Other things could affect your payment as well. For example, if you are divorced from someone you were married to for more than 10 years and they made substantially more than you, you might be able to draw on their benefits. This does not affect the benefits that your ex-spouse can receive.

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