What comes to mind when planning for your retirement? Enjoying nature, time with family, spending blissful hours on hobbies? Regardless of what defines an ideal retirement for you, financial confidence boosts the comfort of any retirement. The great news is you can attain this confidence by simply finding the balance between your money and sound financial advice. Let me explain.
They say money can’t buy happiness, but it sure is necessary for day-to-day living expenses. On top of daily expenses, there’s certainly some things you’d like to spend money on, like new fishing reels or even an entire fishing boat. Maybe you figure when you retire you’ll cut out work related expenses like gas for the daily commute, work attire, and lunches out, leaving plenty of extra cash. However, most people don’t realize the work expenses tend to translate into other expenses, such as medications for aging bodies or trips to those places you always wanted to visit. So how much should you plan to save for retirement?
Most financial advisors agree planning for 60-80% of your current income is best to handle retirement’s day-to-day expenses plus some special purchases. You may receive extra funds from Social Security, however the allotment will likely be frugal compared to what you can accrue through proper retirement planning.
Start saving today. It doesn’t have to be much; it just has to be dedicated retirement funds. One of the biggest mistakes people make with their retirement funds is dipping in or cashing out investments prior to retirement. The IRS does allow certain hardship exceptions where withdrawal from retirement funds is allowed without penalty, but it’s better to maintain an emergency savings fund instead. Stay vigilant; keep retirement savings solely for retirement. Once you figure out how much you’ll be saving from each paycheck, it’s time to put the money to work.
Sound Financial Advice
Putting money into ordinary savings accounts is fine, but placing it into accounts where it might grow can be the difference between living a retirement on a strict budget and a financially comfortable retirement. Many accounts have pros and cons to include different tax rules and the ability for your company to match your contributions, which is fantastic— it’s essentially a small pay raise.
Understanding your company’s retirement plan can be confusing enough, but what about investing: how do you know where to put your money? Do you spread funds out or concentrate them? When should you cash out? It feels like gambling, and in a way it is, but unlike most casino games, investing can be simplified with knowledge and experience. That’s why sound financial advice can boost your retirement comfort.
According to a 2014 Vanguard’s study individuals who sought financial advice for their retirement plans made 3% more than those who didn’t. That’s after the fees they paid the professionals. Analysts determined the reason for this difference is that most people end up making financial decisions based on emotions, rather than thoughtful knowledge. Advisors rely on knowledge and experience; they’ll ensure you don’t do anything too drastic with your funds on a whim.
In fact, financial advisors can be so beneficial, our government wants to make them accessible to everyone. The Pension Protection Act of 2006 ensures there is no account balance restrictions dictating who can use an advisor. This means even if you’re on a company retirement plan, you’re eligible for an advisor to help navigate retirement saving waters. You’ve worked hard for your savings, allowing someone to help make the most of the money may boost your comfort during retirement.
Comfort in Retirement
Comfort in retirement might be better achieved through a balance of personal financial discipline and seeking the right financial advice. When it comes to money, you have to stick to a budget. Save just a little bit every paycheck. It adds up, even faster when invested properly. Learn the attributes of your company’s retirement plan, and consider working with a professional to possibly boost your investment returns. Your financial advice shouldn’t be hearsay, it’s worth working with a reputable financial advisor. In the end, by saving a little every day and investing that money with the help of a knowledgeable advisor, most people achieve comfort in retirement.
Now that help is available…
Whether you have a dollar or a million dollars in your retirement account you will be able to explore the value of a real advisor simply by visiting the Self Directed Brokerage Account advisor contact site. From this site you can begin to take advantage of the features of your retirement plan. If you wish you can also download a fact finder sheet that can be used to create your personal retirement financial plan.
Most company retirement plans are eligible and more are being added every day.
Watch for our next post on why just 1% matters so much for your future retirement.
To learn more about Rick Willoughby, view his Paladin Registry research report.
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