Here are five good action steps for any retirement strategy.
Many experts recommend that you pay off major debts, such as home mortgages, college loans and other significant cash-flow drains, as quickly as you can. By paying off your debts, you can greatly reduce the amount of money you’ll need each month during retirement.
Set up regular, automatic deposits to savings from your paycheck, checking account or both. By making it convenient, you’ll save regularly and won’t spend the money instead.
The sooner you start saving for retirement, the more time your money has the potential to grow and the harder your money works for you. Even if you can only set aside a little each month, starting early could help you to take advantage of the potential of compounding. And even if you didn’t start early, it pays to start now. Contributing regularly is key.
Contributing to a retirement plan can help you to save more, save more often, and start saving now to give your money more time to grow. Consult with your employer and a retirement planning expert to discuss what retirement plan options are available to you.
If you’re over 50 years of age, 401(k) plans and IRAs offer the option of investing additional catch up contributions.
As your target retirement date draws closer, you may want to reduce the percentage of stocks and increase the percentage of bonds in your portfolio. That’s because the prices of stocks can go up and down quickly over the short term, while bonds are more stable and produce a steady source of income.
Also, ask your investment advisor about investments specifically designed for retirement.
Review your annual Social Security statement to learn about your benefits and options. Make sure your personal information is up-to-date and your wage records are accurate.
Click the Next button to learn how to determine the money you’ll need.