Saturday, January 5, 2013, AM | 1 Comment
Every year passes and we wish it was better than previous years. Recently, because of the worst recession in memory, it was a volatile and financially uncertain period and the new year seems to be the same. Let’s hope it turns out better for all of us.
There are still certain things you can do to get back on track to your financial success, especially in your retirement. Remember to look for new opportunities.
The following resolutions offer very specific steps to consider that can provide more financial discipline and better prepare you for retirement.
Based on your age, you can take different steps that can lead you to financial success in your retirement.
Between the ages of 25 and 35
If you are in this age group, you have quite some time to prepare for retirement.
Learn About Your Employer’s Retirement Plan
If you are covered under your employer’s retirement plan, your employer is required to give you a plain language explanation of the plan called a “summary plan description.”
Develop a strategy to achieve long-term goals
It’s easy to procrastinate so set up a “painless” payroll deduction for saving.
Enroll in 401(k) plan
Enroll in 401(k) plan and contribute maximum amount, if possible. The 401(k) limit has increased almost every year. Try to increase the contribution to its maximum.
Open and contribute to IRA
Open and contribute to an IRA based on your savings goals. IRAs are easy to get, easy to contribute to and easy to save with. Most Americans can set up an IRA – whether it’s a traditional IRA or a Roth IRA – and save on taxes.
Investing in stock
Because you are young, you can take risks. Start investing in stocks and equity mutual funds. You can follow the Rule of 100 when investing. You might be able to invest 65% to 75% of your savings in stocks.
Between the ages of 36 and 54
In this age group, you are at a peak as far as your earnings. You generally need to refine and manage your retirement strategy and contribution levels.
Monitor and re-balance your portfolio at least once a year.
Catch up and/or max out on 401(k) plan. If you are 50 or older, you can contribute additional money to your 401(k).
IRAs also allow an additional money in contributions for older workers.
Simplify and consolidate your assets.
You can invest half of your savings in stock and equity mutual funds.
55 or older
Investors who are within five to 10 years of retirement should anticipate needs and take action to make sure they are prepared.
Create income plan for your retirement to determine when you can retire. That will ensure a steady income to cover your most important expenses.
Sign up for Social Security and Medicare. You can sign up for Social Security benefits as early as age 62.
Lower your investment in stocks at this stage in your life. You can’t take many risks at this point. You need to be conservative in investing.
Take Your Required Minimum Distributions
If you are 70-1/2, you are generally required to receive a required minimum amount from your qualified retirement plan or IRA by year-end.
Review Your Social Security Statement
When the Social Security Administration sends you a Social Security Statement, it is your personal record of earnings on which you have paid Social Security taxes and a summary of estimated benefits you and your family may receive as result of those earnings.
These benefits include retirement benefits and protection in case you become disabled or die before retirement age. For more information, request a Social Security Statement.
Learn About Your Spouse’s Retirement Plan
Many retirement plans provide benefits for spouses. So be aware of it.
In a Nutshell
Whatever age group you belong to, always have a good strategy for retirement whether that’s IRA or 401(k). Every year assess your strategy and the financial products you take part in and re-balance, if need be.