By : Lizzie Weakley
Maintaining financial security during one’s retirement years does not simply happen on its own, it must be worked for. With a constantly evolving economy, here are six essentials that will not just make a retirement financial feasible, but also make it enjoyable and worth the hard work.
1. Plan Backwards
In order to stick to a strict retirement plan employees must be excited about their future. While some corners may need to be cut in the future, one of the most effective ways to do this is to plan out the ideal retirement then start setting goals in reverse. This is opposite of the traditional method of simply putting some money away and leaving off these important choices for later.
2. Figure Out the “When”
Choosing an age for one’s retirement is typically the most difficult step in this process as well as one of the most important. Most are going to overshoot or undershoot their planned retirement age by at least a few years, but in order to create any kind of plan a rough date or age must be chosen as early on as possible.
3. Let Your Employer Take on Some of the Burden
Any time that a company offers a retirement account such as a 401(k) or 403(b), employees should invest as much as they possibly can into it. These accounts are almost always federally insured, will cut down on your yearly taxes, and investments are often matched by the company itself.
4. Cut Out Debt
For those that are paying off debt, it can be tough to justify putting money into a retirement account. In the long run, most specialists agree that it is better to pay off any debt, especially high interest debt, before investing money into one’s retirement (Source:WBLI Incorporated).
5. Consider a Paying Hobby
Transitioning into a fixed income after retiring is difficult or outright impossible for many, and this is why so many now look to “paying hobbies” to fill in that gap. Retirees should take a look at some of their favorite hobbies and pastimes and figure out if there is a way to earn a small income from it after leaving their career.
6. Protect Your Assets
From the moment that one begins to plan for their retirement it is also time to think about estate planning. Estate planning will ensure that all of your hard work does not go to waste if you pass away and will encompass issues such as life insurance and a will.
Your retirement is going to be a period of your life that you have worked hard for, and this means that you deserve to enjoy it. Be sure to protect your golden years by keeping these six essentials of retirement planning in mind.