Posted On: June 15, 2023 by American First Credit Union in: Savings
Regardless of age, retirement is something that all adults spend time thinking about. Being proactive is the best way to ensure that you have a comfortable retirement and financial security. We are going to share with you the steps that you need to take for proactive retirement planning! Continue reading to find out more.
#1 Start Now
Retirement planning can start at any age, and no matter what age you are now, it is best to start planning as soon as possible. Many individuals will start planning as early as their twenties to get ahead with their retirement savings, and others may start later in life and need to catch up. Any stage that you are at is a good time to start, even if you are older as planning late is better than not planning at all.
#2 Estimate Expenses
One of the first steps to take when trying to be proactive about retirement planning is to estimate your retirement expenses. Be sure to anticipate realistic estimations about your spending habits, housing costs, utilities, and other personal expenses. The biggest mistake you can make when estimating your retirement expenses is not being realistic. You want to be as realistic and accurate as possible to ensure effective retirement planning.
#3 Start an Emergency Fund
Just as it is important to have an emergency fund while you are still working, it is important to have one during retirement too! Emergencies like broken appliances and unexpected health expenses will cause less stress if you already have an emergency fund to use.
#4 Downsize Debt and Assess Savings
To position yourself for a successful retirement, it is essential to evaluate your financial standing, particularly your savings and debt. If you carry a substantial amount of debt, such as credit card balances, student loans, mortgage, or vehicle loans, it is advisable to assess which debts you can pay off to minimize your debt load as you transition into retirement.
#5 Don’t Touch Your Retirement Savings
When embarking on retirement planning, establishing a retirement savings account can be highly advantageous. However, it is crucial to avoid tapping into the account prematurely to ensure that the funds are available when you need them in retirement. Early withdrawals may result in adverse consequences, such as diminished tax benefits, principal reduction, and interest forfeiture.
Retirement planning doesn’t have to be stressful and the more you plan, the easier it will be! To get started on your retirement planning, contact us today or visit our website to learn more about our financial services!
