Daydreaming about retirement – a few reminders
You’re getting so close to retirement that you’ve started to allow yourself a little time to daydream—maybe imagining quality time with your grandchildren, cruising around in an RV, or finally having some freedom to delve into your favorite pastime.
With all those fun plans in store, you’ll need to make sure your financial strategy is up to snuff as well. Whether you’re a couple or slightly more years away from retirement, you can always use a quick retirement readiness rundown:
Shore up your savings
How much do you have saved up? According to the Wall Street Journal, you should conservatively have eight times your salary saved. Other sources say that figure should be closer to 11 times.
Are you close to that number? If not—or even if you have met your goal—it doesn’t hurt to take steps now to bolster your savings, including maxing out your 401(k) contributions. Remember that people who are age 50 and older can make annual catch-up contributions to their retirement plans.
And, don’t forget to create an emergency fund apart from your retirement accounts for any unforeseen expenses that may creep up.
Decide on Social Security
When you choose to start drawing Social Security retirement benefits makes a difference. If you decide to start receiving those benefits at age 62, rather than age 66, your benefit will be reduced by 25 percent for the rest of your life.
Consider downsizing
The oft-quoted statistic that people can comfortably live on 70 to 80 percent of their pre-retirement income covers an average retiree lifestyle. But, if you plan to take high-ticket vacations, or if you run into serious medical issues or other unforeseen circumstances, it helps if you’ve made some adjustments to lower your expenses.
Frequently, adjustments include a smaller house or condo, or moving to an area where your dollars go farther due to lower cost of living or taxes. For more ways to reduce expenses, check with your personal banker or financial planner.
To learn more about investments, contact an IB Wealth Management representative at 800.300.0459.
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