April 3-7 is National Retirement Planning Week 2017, an effort led by The National Retirement Planning Coalition (NRPC) to promote the importance of comprehensive retirement planning. In honor of this dedicated week, we put together a few tips to help you prepare for retirement. (Note: these tips are, of course, valid every other week of the year as well.)
Prepare: One of the most important steps to get ready for retirement is dedicating the time to prepare well before retirement age. A major reason that people are unprepared for retirement is fear – turning away either because they are intimidated by the amount of information and tools available to them, or because they feel it’s too late to start thinking about their future. While preparing for retirement at an early age is prudent, it is never too late. If you are unsure of how to get started, or would like to learn more about the various retirement planning tools available, working with a financial advisor can help you navigate the process. Websites like mint.com and nerdwallet.com offer retirement calculators that can give you an idea of where you stand on your retirement journey.
Utilize Match Programs: Many companies offer matching 401(k) contributions to help employees boost their retirement savings. However, it is important to be aware that the threshold of an employer match can vary by company. For that reason, it is important to speak with your company’s human resources personnel to determine the threshold and figure out if you have the financial means to meet it. You should also be sure to take advantage of catch-up contributions, which allow workers aged 50 and older (including workers turning 50 that year) to increase 401(k) contributions by $6,000 per year (from the $18,000 regular limit up to $24,000).
Set Goals: While many people make an effort to regularly save money for retirement, whether it is through 401(k) and IRA account contributions or simply setting aside part of their paycheck in a savings account, they often do not take the time to map out the costs associated with their retirement goals. While most retirement experts advise that a person needs income in retirement that replaces 70-85 percent of their final year’s salary, an individual’s target retirement income can vary based upon their goals. If you want to travel or buy a second home in retirement, for instance, you need to make sure that you have the finances available to achieve the lifestyle that you want. While assigning a monetary value to your retirement plans can be a reality check, it is important to know if your finances are in line with your goals.
Whether you are just starting your career or are an established professional, it is never too soon or too late to begin planning for retirement. Perhaps National Retirement Planning Week is the motivation you need to set a course toward retiring on your terms.
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Burlington, MA 01803
Tel: (781) 229-9500
Fax: (781) 229-2700
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