Are you in your 30s or 40s? Already have started with the financial preparations for your twilight years?
If you belong in the above-mentioned age group, this is the right time to make major financial decisions. Things like investment planning, asset allocation, assessment of the cost of living (current and future), health care expenses, etc need to set right from the beginning. You don’t want to be a 60-year-old man/woman, broke and penniless. This post is about the dos and don’ts for a successful retirement.
Do’s for a Successful Retirement
1) Invest in pension accounts like the 401k and IRA pen
Both 401k and Roth IRA are tax-qualified pension account regulated by the Internal Revenue Code. With these pension accounts, you get the benefits of saving a tiny portion of your monthly salary without having to pay tax on it. Moreover, a 401k is also sometimes matched by the employer.
2) Take care of your health right from a young age
This is one of those things that can save you a ton of money during your twilight years. Most people, irrespective of how healthy their retirement savings are, lose a lot of money to health-related expenses. They are always paying hospital bills, buying expensive orthopedic equipment, etc. The good news is, it is possible to stay healthy during retirement years by taking care of your body right from a young age.
3) Constantly create new goals and stay motivated
It is very common for retired people to get in the grips of psychological disorders like laziness and depression. It is not easy to quit doing something you have been doing for your entire adult life and start a new life. To stay motivated, strive to create new goals and do everything in your power to achieve them. This is how you can successfully and happily retire.
Don’ts for a Successful Retirement
1) Do not ignore health care expenses
Even if you manage to stay fit and healthy until your twilight years, there are still some healthcare costs that you can’t avoid. Life is unpredictable. You don’t when a road accident could occur or an unknown virus would take you under its grips. According to Fidelity, an average American couple spends approximately $285,000 on healthcare costs until the end of their life. Will you manage to save the required amount within your working days? If not, do you have a plan B?
2) Don’t ignore tax credits and deductions
Every year, the relevant authorities in the government agencies sit down together to write down the tax rule for the upcoming years. Tax reform takes place every year. New laws are jotted down to increase the amount an average taxpayer saves for his/her retirement. Always expand your knowledge on how you can avoid paying tax on the money you earn. Stay in the loop by reading blogs such as this one.
3) Do not quit your job too early
Most people make the mistake of quitting their job way too early–before the retirement age. This night work well if you have sufficient assets to take care of you and your spouse in your twilight years. But you might be making a huge mistake if you are quitting your job just because you think it is the right time to walk away. In such a scenario, get a hold of a financial advisor and ask them to perform an audit of all your financial accounts.
Just like everyone else does, you are going to make some mistakes. The road to a successful retirement is not easy. But don’t worry about it. Just learn from your mistakes, early on, and make sure you are repeating them in the future.