A Road Map to Retirement Planning

A Road Map to Retirement Planning

Whether retirement is right around the corner or many miles ahead, financial security should be waiting to greet you when you reach your destination. Preparing for a comfortable retirement isnít an easy or familiar path for most people.

Published Thursday, February 13, 2014

 

Whether retirement is right around the corner or many miles ahead, financial security should be waiting to greet you when you reach your destination.  

Preparing for a comfortable retirement isn’t an easy or familiar path for most people. It takes years of planning, working, saving and sacrificing. But if you truly want to enjoy all of the amenities the golden years have to offer, that hard work will pay off by providing you with a substantial amount of money to do so. And think of the peace of mind that comes with not having to worry about finances. 

Wherever you are on the road of life, it’s never too soon or too late to start saving for your retirement, so get going. Obviously the earlier you begin, the longer your money has to grow. But even if you’re getting a late start on your retirement savings, there are many ways to play catch-up and accumulate enough to keep you on track for a sound financial future.  

Just as important as saving money is to your journey toward retirement, so is the process of realistic planning and goal setting. Estimate your retirement expenses and then deduct Social Security and any other sources of supplemental income you expect to have. This will give you a good idea of how much you’ll need to save to meet your needs.  

Keep in mind there are very few shortcuts along the route to a successful retirement savings plan. You really need to remain disciplined and stay the course. One of the easier, faster ways to get there, however, is to participate in your employer’s 401(k) program. Not only will you enjoy significant tax breaks with this savings plan, but you’ll actually get free money in the form of matching contributions from your employer. While there are limits to contribution amounts, the Tax Relief Act allows people 50 years and older to contribute additional funds in an effort to make up for getting a late start in saving for retirement. 

Even if you have a 401(k) plan through your employer, you will want to consider enhancing your retirement savings with an individual retirement account (IRA). With a traditional IRA, all growth is tax-deferred so you only pay taxes on your investment gains when you make withdrawals during retirement. You may also be eligible to deduct any contributions you make to this type of IRA. A Roth IRA is another option. Contributions are not deductible but all growth is tax-free so you pay no taxes when you withdrawal funds upon retirement. 

Depending on how far down the road retirement is for you, a strategic, risk-assessed combination of stocks and bonds could provide a substantial amount of financial growth. A professional financial advisor can help you determine how to divide your investments effectively and efficiently between stocks and bonds so you have the potential of gaining long-term wealth while still offering shelter to a percentage of your funds.

The journey to achieving a sound financial future throughout your retirement years may, at times, seem like your driving in circles but stay on track. Your commitment to saving money and making smart investments will pay off year after year once you reach the exit ramp to the golden years. 

 

http://money.cnn.com/magazines/moneymag/money101/lesson13/index.htm

http://www.ssa.gov/retire2/

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