Ideally, both estate planning and retirement planning should begin as soon as you enter the adult work world. Throughout your life, those two plans may remain separate but intertwined. The closer you get to retiring, the more those two plans will necessarily merge. For now, however, the Essex Junction estate planning attorneys at Unsworth LaPlante, PLLC offer some practical retirement planning tips.
Tips To Make Retirement Easier and More Financially Secure
The idea of retirement may seem a long way away for you if you are just entering the work world; however, the earlier you begin planning for retirement the more financially secure you will be when the time comes to retire. In fact, you might be amazed to find out what a huge difference it makes to start saving earlier in your working career. Of course, it you are still relatively young you may not know much about retirement planning. To ensure that you are on the right course with your retirement planning, you should consult with both your estate planning attorney and your financial advisor on a regular basis. For some overall guidance, however, consider the following practical tips:
- Educate yourself. Unless you happen to be a financial advisor, there is a lot you probably don’t know about investing and financial planning. Take some time before you create your retirement plan to educate yourself about basic investment concepts and lingo.
- Take advantage of employer sponsored options. Although the days of fully funded pensions are all but gone, most medium to large employers (and even some small ones) offer some type of retirement plans for employees, such as a 401(k). If yours does, take advantage and match your employer’s contributions.
- Consider an IRA. An Individual Retirement Account (IRA) is like establishing your own pension fund. An IRA can also offer significant tax advantages as well if you choose the right type.
- Set up automatic deductions. You may have heard the expression “pay yourself first.” This is an excellent mantra for retirement planning purposes. Moreover, if you set up deductions to come out of your paycheck before you ever see the money, you will be less likely to miss the money. After a while, you will likely forget anything is being deducted.
- Make money difficult to reach. The more hoops you must jump through to get money out that is meant for retirement, the less likely you are to disturb it. With that in mind, put your money in investments or in accounts that are not easy to get to so that you are required to think about it before taking the money out.
- Diversify your assets. You have probably heard the saying “don’t put all your eggs in one basket.” This applies to retirement planning. While long-term investment strategies are generally a good idea when it comes to retirement planning, you should also have some cash on hand and never put all your investments into one fund or one account. No matter how safe a fund/account may appear, nothing is completely recession proof nor is there ever a guarantee of quality management.
- Make sure you understand fees. New investors frequently get hit with large fees because they don’t know what is customary in the industry. Those fees can add up over the years. Take the time to first figure out the fees you are paying and, second, to find out if they are in line with the norm for the type of investment or service.
- Pay down debts. The closer you get to retiring you should focus more on paying down large debts, such as your mortgage. Not only does that increase the value of your assets but it also reduces your monthly expenses and reduces the amount of interest you pay over the long run.
- Consider delaying Social Security benefits. The increased amount of your monthly Social Security retirement benefit can be significant if you are able to delay your retirement just a couple of years.
- Merge your retirement plan with your estate plan. This should be done early on to ensure that the two plans are compatible and that decisions made in one plan do not conflict with objectives in the other plan.
Contact the Essex Junction Estate Planning Attorneys
For more information, please attend one of our upcoming FREE webinars. If you have questions or concerns about retirement planning and how it relates to your estate plan, contact the experienced Essex Junction estate planning attorneys at Unsworth LaPlante, PLLC by calling 802-879-7133 to schedule your appointment today.