No matter your age, the time to plan for retirement is now. If you haven’t started yet, don’t worry, just begin. Here’s how.
Imagine Your Retirement
Take 30 minutes to think about and get clear on what you want your retirement to look like. Consider these topics and imagine them in the present-tense:
- Giving to children, grandchildren, or charity
Workplace Retirement Plans
Take advantage of your employer’s retirement benefits. Contributing $200 from your paycheck to your 401k every week reduces your net pay and taxable income, and matched contributions from your employer make it a no-brainer.
Go to the Pros
Unless finance is already your job or a hobby, seek professional advice. Not all financial planners are created equally. Get assurance your professional is educated and has your back.
Certified Financial Planners (CFP) have education requirements to become certified and ongoing requalification to keep it.
A fiduciary goes above what’s required for a CFP. They show all their work, including how they get compensated—usually via fixed fee—and will address your entire financial picture, including insurance.
Either pro will want to know your retirement goals and help set you on the path to get there.
Compound Interest for the Win
Experts say to start retirement savings at age 25 because of the power of compounding interest. If it’s so powerful, why wait? Someone who invests $2400 a year at age 21 only until they’re 30—without making any additional contributions—will end up with more money at retirement than someone who contributes that same amount starting at age 30, every year until age 67.
The secret power to compound interest is time: the number of compounding cycles the money goes through.
Hop on that train, no matter your age. Your kids can do it when they turn 18.
The Ugly Truth about Long-Term Care
The Alzheimer’s Association estimates the cost of care in the last five years of life for someone with dementia at $367,000—care not covered by most medical or disability insurance policies. Finances give you and your loved ones the power to choose the quality and location of your end-of-life care.
Long-term care insurance can facilitate care coordination, in-home care, and home modification among other needs. Start getting it when you turn 60 as a birthday present to yourself.