5 Steps for Short-term Retirement Planning
You should start developing solid retirement plans decades before you actually retire
. However, if impending retirement has somehow snuck up on you, follow these steps for retirement planning, which can work in as little as five years prior to you leaving your job.
Put some money in investments such as life insurance products, as well as more conventional means of protecting or creating wealth like money market, checking, and savings accounts. You'll need these to buffer your money against possible glitches that can happen when you're about to withdraw money from your retirement accounts.
Calculate how much of a nest egg you'll need before retirement. Document your net salary and your expenses, and add in costs such as home renovation, recreation, travel, and other miscellaneous expenses. After this, figure out how much will be coming to you from Social Security, 401K, pensions, and other investments. If your expenses are bigger than your projected income, save more money, spend less during your retirement, work extra years, or get higher investment returns.
Strengthen your investment portfolio by diversification. Regular withdrawals from your nest egg make it much more vulnerable to the effects of market conditions, inflation, and other related factors. Diversifying increases the chances of your retirement finances lasting you throughout the entire period.
Check the consequences of taxes on your money. Maximize tax-deductible contributions as soon as possible if you think you might move up the tax bracket after some years. You can also receive big tax-free capital gains if you sell your primary residence and move elsewhere.
Take the initiative and learn more about investments and retirement planning by yourself, or with the aid of a professional. You can attend investment seminars, go online for classes, or read books on the subject matter. Your money can last you a lifetime, or become depleted a few years into your retirement. To learn more about what you can do to plan your retirement in very little time, call up your tax advisor or financial planner.
5 Steps for Short-term Retirement Planning
By: Carina Smith
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