Tag Archives: retirement tips

5 Retirement Tips You Need to Know in 2019

Retirement is supposed to be an age of relaxation, free of the stress and hassle felt during the working years. Unfortunately, this isn’t always the case. For those who haven’t properly planned properly, retirement can be even more stressful than the working years. If you’re planning on retiring in 2019, or in the next few years following, there are a few key things you need to know. This article discusses just five of those.

1. Don’t Rely Too Heavily on Social Security Benefits

The amount you receive for social security isn’t going to be enough to live on. Relying too heavily on this income can be disastrous for your financial health. In fact, SSI typically only pays out an average of $17,532 annually, which amounts to around 40% of the average person’s income.

2. Don’t Retire By Yourself

Depression rates are high among retirees. The main culprits affecting senior’s mental health are boredom and lack of socialization. If you plan on retiring but don’t know anyone else who will also be retiring (within a year), then you should hold off a few years. Spouses should plan to retire at the same time for some guaranteed companionship.

3. Plan to Work – Kind of

Working in retirement? It might sound crazy, but a lot of retirees have found that supplementing their income with part-time or freelance work isn’t only good for their finances, but also their mental health. Freelancing has become one of the most popular ways to supplement social security income. Even if earners only earn an average of $10 an hour and work only ten hours (split between two days), they can add $100 a week to their pockets.

4. Plan Your Savings to Include a HSA

HSA stands for “Health Savings Account.” Medicare does not cover everything, and the out-of-pocket costs for retirees can dig into their retirement accounts. Having an HSA can help negate some of the potential costs, including those that could incur if you end up with an unexpected disease or illness in retirement. Even if you and your spouse each contribute $5 a week to an HAS from the age of 30 to 67, you could end up with over $9K to help offset medical costs.

5. Plan to Wait Until 67+ to Withdraw SSI

Although you can begin withdrawing social security benefits at age 62, you won’t be able to withdraw the full amount until age 67. Waiting means a much more comfortable lifestyle in your post-working years. Even if you plan to retire earlier, it may make more sense to withdraw larger amounts of money from your retirement accounts until you reach age 67.

If you take the five things listed above into consideration, retiring in 2019 or the next few years following can be the relaxing experience you so desire… without unnecessary financial stresses. The tips listed above should, of course, be paired with an adequate amount of savings for your own estimated cost of living to be most effective.

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Retirement Tips for the Self Employed

 

Working for an employer definitely has its advantages when it comes to retirement planning. That doesn’t mean you are out of luck just because you are self-employed. It does take a bit more planning, but following these tips can take some of the guesswork out of things.

 

Know your Options

Independent contractors and small business owners have quite a few options when it comes to retirement plans. A few of those choices include:

  • Simplified Employee Pension Individual Retirement Account (SEP IRA)-This plan allows employers to contribute on behalf of their workers, and has no minimum contribution requirement.
  • Solo 401 (k)-Designed for sole proprietors, a Solo 401(k) allows you to contribute up to 25% of your business earnings.
  • Savings Incentive Match Plan for Employees (SIMPLE)-This one is similar to a SEP IRA, but requires minimum contribution amounts (part of which can come from your employees).
  • Defined Benefit Plan-Basically a pension plan you set up yourself.

 

Each of these plans comes with its own advantages and disadvantages. You may find that a SEP IRA or Solo 401(k) is ideal in the beginning when you have few or no employees. As your business grows, you might find a SIMPLE plan more appropriate. When nearing retirement, you could prefer a defined benefit plan, which will allow you to stash large sums of cash away.

 

Set Retirement Goals

Before opening a start-up, one of the first things you should do is create a business plan. Part of that plan should include how and when you will save for retirement. In other words, you need a set of goals to aspire to both now and in the future. Too many entrepreneurs overlook the fact that retirement planning and business planning go hand in hand, and wind up getting caught off guard when it is time to stop working.

 

Who Will Pick up the Reins?

Another issue business owners must face is the inevitable handoff of operations once they retire. Will your spouse or children be responsible for keeping things going, or will one of your trusted employees take over the wheel? Would you rather sell your business outright or shutter your doors completely? Your business is more than just your livelihood-it is your legacy and reputation as well. As such, any decisions as to how it will continue should not be taken lightly.

 

Consult a Professional Advisor

To grow your business and your retirement account, consult with a financial advisor. This individual can guide you in decisions related to your business as well as your personal financial affairs. Large companies have financial advisors at their disposal, and there is no reason for you not to as well.

There’s a great deal of satisfaction that comes from knowing you are in control of your livelihood. As a self-employed individual, you can also enjoy peace of mind about your retirement. If you have thought about starting your own business but were afraid your retirement planning might suffer, you’ll be glad to know that you can indeed have both.

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What Retirement Planning Looks Like in 2015

Retirement Tips

Do you have enough money for retirement? This is an important question, and one that you should be asking yourself in 2015. There are plenty of ways to save money and plan for your retirement, but it is up to you to choose the method that works best for your needs.

IRAs

IRAs, or Individual Retirement Accounts, are by far one of the most popular tools for retirement planning. These are tax advantaged long-term savings accounts that you contribute to over time. Because you agree that you will not withdraw the money for a specific period of time, you get a tax deduction up to a certain income thresh hold. The good part is that your money grows tax-deferred or in some cases tax free which gives you an opportunity to reduce taxes significantly over the long term therefore increasing the potential to put more money in your pocket at retirement.

401k Accounts

For many people, 401k accounts are integral parts of their retirement plans. With a 401k, you choose a percentage of your paycheck to contribute and your employer matches your contribution up to a certain percent and amount. You do not pay taxes on the money that you put into the plan therefore reducing your annual tax bill.  If you switch jobs for any reason, you can take your account with you as long as you are vested in company contributions. Remember that not all employers offer 401k benefits, and remember that withdrawing your savings prior to your retirement date comes with some fairly steep penalties.

Real Estate

The housing market fluctuates over time, and while buying houses to remodel and resale was a great way to turn a profit a decade or so ago, things are different in 2015. Today, it is harder to sell homes since people with fair and even good credit are having more difficulty obtaining mortgage loans. Although real estate is still a solid investment for the long-term, it should not provide your nest egg. If most of your retirement money is tied up in properties, it is a good idea to diversify.

Business Investments

Business investments are always a great option for those who have a keen eye for success. However, bear in mind that if you invest in a seemingly great business idea and that company goes bankrupt, you have more than likely lost the money you invested. In 2015, business investing provides a great opportunity to diversify as long as you make sure to keep the majority of your retirement money in IRAs and 401k accounts.

Wall Street

People have used Wall Street as a way to save for retirement for decades. Buying, selling, and trading stocks on the market – if you are well-versed in the practice – is not only a fantastic way to diversify your retirement portfolio, but it also provides ample opportunity to multiply your investments. Like business investing and real estate, however, the stock market is never certain. If you choose to utilize Wall Street as a method of retirement planning, be sure that you hire a knowledgeable Financial Planner or Advisor.

All of these options are popular among those who are planning for retirement. In 2015, most people are more concerned with the stability of their money than its exponential growth, so they choose IRAs and 401k accounts over riskier practices.

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