Getting serious about retirement planning in the new year? Try these tips

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Imagining retirement by the beach, or with relocation? It all takes planning, and there are tons of tools out there to help.

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Retirement Tip of the Week: If you’ve decided to get serious about retirement planning, no matter what your age, think about what you need and how to get there.

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The pandemic has made it all the more clear why retirement planning is important – not only for living a secure lifestyle into old age, but in an emergency that puts you out of the workforce.

If 2022 is the year you start taking retirement planning seriously, here are some tips and tools to get you started:

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Check out the Businesshala column “Retirement Hacks” For actionable advice on your own retirement savings journey

20 New Year’s resolutions to make your retirement dreams come true

start with questions

It is difficult to plan something without a goal in mind. Before you can even figure out the numbers (even loosely), understand what you intend to do in retirement. If it is a relocation, how much does it cost to live in this new place, including taxes and local health care options?

Businesshala has a tool that includes several variables such as entertainment, climate and budget to find the best places to live. Businesshala also has a column on where to retire, “Where should I retire?”, which answers readers’ questions based on their wishes for this new destination.

Also ask yourself what you hope to do in retirement, whether it’s vacationing and dining out a lot or volunteering. “Start thinking about your purpose in retirement,” said Patti Black, a certified financial planner at Bridgeworth Wealth Management. “You need to know what you’re retiring, not just what you’re retiring from. Who are you and what are you going to do now that you’re not working?”

contribute, contribute, contribute

It’s important to put money aside, until it’s time to resign. For those who are not close to retirement but are starting to think about it, “the most important thing is to take the first step, even if it seems insignificant,” said certified financial planner Ralph Bender at Enduring Wealth Advisors. . “Despite the options available to them, making only 1% or 2% off each paycheck gets them started.”

Financial advisors usually suggest to save 10%-15% of one’s salary, but this is not always possible, so start with what you have. If your employer offers a 401(k) with a match, try to match it. If there is no 401(k) at work, open an IRA. There may be times when it is too difficult to contribute, especially when meeting other financial and family obligations. When this happens, temporarily withhold the contribution and promise to increase it when more money comes in, such as with a pay increase or after a job change.

Also pay attention to asset allocation. Typically, the farther away from retirement, the more aggressive the portfolio can be. Being close to retirement doesn’t mean that the portfolio should be invested primarily in fixed assets, but it should be more conservative to avoid large losses during a market downturn (somebody near or in retirement can cover those losses). There are no years to complete like someone retiring in 40 years in 20 years).

Have a question about your own retirement concerns? Check out the Businesshala column “Help My Retirement”

plan for social security

Not everyone believes that Social Security will be available to them when they retire, especially millennials. Social Security currently faces bankruptcy within the next 15 years, at which point the trust funds supporting the program will run out of money. If this happens, beneficiaries will see an estimated 20% reduction in their cheques. But Congress has never let Social Security fail in the first place, and experts don’t expect that to change.

Many factors go into Social Security claiming strategies, including a person’s work and earnings history, their age, their health and longevity expectations, their spouse’s benefits and if they really need the money as soon as possible. go. There are a handful of calculators available specifically for claiming Social Security.

as well Confused about Social Security – including spousal benefits, claiming strategies, and how death and divorce affect your monthly income?

Find out the numbers – and reach out for help

The higher the retirement age, the more difficult it is to know exactly how much money will be needed to maintain the same, comfortable quality of life in retirement. There are lots of online calculators to help you crunch numbers. NewRetirement, in partnership with Businesshala, created a The calculator This next chapter for readers to start their financial planning. It asks questions such as marital status and age, cash inflows and outflows, ideal age for retirement and when the person expects to claim Social Security. The reader can then choose a few scenarios, such as a 10% reduction in expenses or a delay in Social Security, to see how those events will affect their financial needs and retirement means.

Calculators are helpful, but they don’t always ask all the right questions—and they can’t tell when a user is over- or underestimated their finances. A financial planner can do this. Nadine Marie Burns, a certified financial planner and CEO of A New Path Financial, said, “People really should seek the help of a certified financial planner to understand where they are and work on a plan for their particular needs. Huh.”

Don’t even jump for the first professional. Burns suggests interviewing Many people To find the best connection. “Retirement can be the most expensive financial period of life, and working with a professional can uncover issues and options you may not have considered.”

are certified financial planners a type Financial professionals who can help individuals make sense of their finances – be sure to check with your advisor, and don’t rely only on recommendations from family and friends. Here’s how to do it.

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