7 Tips to Get Ready for Retirement

We’re all working toward retirement, but so many people do a poor job of preparing and don’t get to enjoy their golden years. By starting now, you can make sure you’re in a secure spot when you retire. Here are 7 tips to help you get ready for retirement.

1. Understand Your Needs

To start, you need to understand your needs in terms of retirement. Some people need a ton of money to retire, while others simply need enough to pay bills and stash a little money for emergencies. Do you want to travel and go on cruises when you retire? When do you plan on retiring? Consider factors like this and make a detailed plan of how much money you’ll need to retire.

2. Start Saving

Whatever you do, start saving and organize your finances as soon as possible. The earlier you start saving for retirement, the more money you’re going to have when it’s time to stop working. Even if you’re stashing $20 a week, you’re still helping set yourself up for retirement. For the best results, create a budget so you can figure out a set amount of money to save each week. Not sure how to create a budget? Don’t worry, it can be simple as outlining your expenses and income on a spreadsheet.

3. Retirement Plans

If your employer offers a retirement plan, make sure you’re taking advantage of that. Many employers offer a retirement plan with an employer match (up to a certain percentage of your weekly income), which means free money towards your savings. To best set yourself up for retirement, contribute the maximum amount of money that your employer will match.

4. Reverse Mortgage

Even with proper planning, retirement isn’t always easy. If you end up needing some extra cash when you retire, a reverse mortgage gives you a loan option that doesn’t require monthly payments. “What is a reverse mortgage?”, you might ask. A reverse mortgage lets you turn home equity into cash with no monthly payment, which makes it a great option for many seniors.

5. Investing

You can also invest your money if you want to build a larger retirement fund. While keeping money in a savings account accrues some interest, it likely won’t make a huge difference in your overall savings. Investing, on the other hand, can offer a substantial return when you do it right. Pick up a few books about investing and learn some of the basics if you want to give it a try. Just remember, you don’t want to put all your eggs in one basket.

6. Start an IRA

An individual retirement account (IRA) is a good way to plan for retirement without an employer’s help. You can set up an IRA through most financial institutions, and you’ll have your choice between a traditional IRA and a Roth IRA. The Roth IRA is the better choice for most people, as the money is taxed as you contribute to your IRA so you don’t have to pay taxes later. With a traditional IRA, your account will look like it has more money, but you’ll have to pay taxes when you decide to withdraw that money.

7. Don’t Touch Your Savings

Whatever you do, don’t dip into your savings if you can help it. You might be tempted to buy a new car or spend a little money here and there, but those savings will be your lifeline when you retire. Once you start saving up money, don’t touch your savings unless you absolutely have to for an emergency.

Planning for retirement while trying to live a rich, fulfilling life can be difficult, but a little effort goes a long way. What’s important is that you take steps now that help build your future. Start saving, consider a retirement plan, and open a Roth IRA, and you’ll be well on your way to retiring in comfort.