Whether you are planning to retire from your job in the next few years or decades from now, these financial planning tips will greatly help your bottom line when the time comes:
Tip: Crunch the Numbers for Your Current and Future Lives
If you do not have a household budget for now or for your retirement, then now is the perfect time to start working on them. Before you can retire, you first need to know how much money your life currently costs you. Armed with this important information, you can then use today's figures and online cost of living increase calculators to estimate your future retirement needs. Once you know what your future income and expenses are estimated to be, then you can work on a plan to save up the money you need.
Tip: Run the Numbers for Your Future Social Security Payment Amounts
Under the current rules of the Social Security Administration (SSA) you can opt to start your Social Security retirement payments when you turn 62 or at a later date. For each year you choose not to collect after you turn 62, your future monthly payment amount will be higher.
By reviewing your account with the SSA by phone or online on their website, you can estimate your payments at various different ages. You can then use this information to help formulate your retirement budget.
Tip: Pay Off Your Cars and All Consumer Debt
As you start planning for retirement, it is important you make paying off all of your consumer debt and automobile loans your top priority. Every dollar of debt you currently have costs you extra money each month that could otherwise be saved for your future retirement.
Also, your income will be a fixed amount when you retire, so the less money you have to spend on monthly debt payments, the more money you will have to save or spend on things that are important to you.
Tip: Only Hire a Fee-for-Service Financial Planner
Finally, it is important that you work with a financial planner to ensure the plans you have made for your retirement are sound. However, you should avoid working with one who works on commission. This type of financial planner makes their money based on the investments you make with them. Instead, choose a fee-for-service financial planner who you pay a set fee and they give you advice without having any potential conflict of interests.
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