What does retirement security mean to you?: Suggestions on how can you achieve it?
October is National Retirement Security Month. But what does retirement security mean to you? And how can you work toward achieving it?
Here are some suggestions:
Build your resources. While you're working, save in tax-advantaged accounts such as your IRA and 401(k) or similar employer-sponsored retirement plan.
In your 401(k), contribute at least enough to earn your employer's match, if one is offered, and increase your contributions whenever your salary goes up. Remember, especially early in your career, time is often your biggest asset.
Be sure to save early, since the longer you wait, the more you'll need to save to help reach your goals.
Look for ways to boost retirement income. When transitioning to retirement, you can take steps to align your income with your needs. For example, consider
You can start collecting it as early as 62, but your monthly payments will be much larger if you can wait until your "full" retirement age, typically between 66 and 67. (Payments will "max out" at age 70.)
So, if you have sufficient income from a pension or your 401(k) and other retirement accounts, and you and your spouse are in good health with a family history of longevity, you may consider delaying taking
Prepare for unexpected costs. During your retirement, you can anticipate some costs, such as housing and transportation, but other expenses are more irregular and can't always be predicted, such as those connected with health care. Even with Medicare, you could easily spend a few thousand dollars a year on medical expenses, so you may want to budget for these costs as part of your emergency savings, and possibly purchase supplemental insurance.
You may also want to consider the possibility of needing some type of long-term care, which is not typically covered by Medicare and can be quite expensive.
The average annual cost of a private room in a nursing home is more than
Do your estate planning. It's hard to feel totally secure in retirement if you're unsure of what might happen if you have an unexpected health event, become incapacitated or die earlier than expected.
That's why you'll want to create a comprehensive estate plan – one that might include documents such as a durable power of attorney, a will and a living trust.
A review of your insurance coverages and beneficiaries can also help protect your assets and ensure they are distributed the way you want. In creating your plan, you will need to work with your financial advisor and a legal professional, and possibly your tax advisor as well.
Thinking holistically about your retirement security and developing and executing a strategy aligned with your goals may help free you to enjoy one of the most rewarding times of your life.
This article was written by
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