Planning for a smooth retirement should begin decades in advance so that you can embed financial goals into your long-term strategy. Many Americans, however, face enormous economic challenges, including saving for retirement. Here are six important points to consider while optimizing your retirement planning and saving strategy.
Women and Black and Hispanic Workers Are More Susceptible to Experiencing Financial Insecurity During Retirement
According to research, women aged, 65 or above are 43% more likely than men to fall below the poverty level. 17% of Hispanic and Black Americans aged 65 or more live below the poverty line against 7% of whites and 11% of Asian Americans of the same age. Therefore, they often rely on Social Security Benefits during retirement.
Many Workers Don’t Have Employer-Sponsored Retirement Plans
Only half of the Hispanic workers in the United States have employer-sponsored retirement plans compared to 75% of white workers. Also, Black and Hispanic workers are less likely to have retirement plans than white workers. Only 47% of working women have retirement plans. Anyone in financial difficulty must speak with an expert on retirement plans to plot a clear path to adequate future resources.
Take Advantage of Your Employer-Sponsored Plan
Find out if your employer offers a retirement plan since it’s the easiest route to comfortable retirement savings. Contribute as much as you can each year, and your employer will match your funds. Employers have various plans to offer their employees, such as SIMPLE IRA and Simplified Employee Pension (SEP) plans.
Know-How You Can Save for Retirement
You have multiple options for retirement planning since there are a variety of plans to choose from in case your employer doesn’t offer a plan. You can open an IRA or 401(k) account if you are self-employed. Some people hire a federal retirement planning consultant to help them map out a viable retirement plan. Federal employees can benefit from a federal retirement thrift savings plan, tax-deferred savings, and investment plan.
Devise a Financial Plan to Determine How Much You Can Save
By maintaining a regular budget, you’ll have a better idea of how to spend or save your money. Debt management for borrowing and risk management for investing are two important asset protection strategies. Note that debt can be a part of financial planning, such as if you borrow funds to launch a business. The key is to keep debt from spiraling out of control, leading to bankruptcy.
Increase Your Contributions While Nearing Retirement
Once you turn 55, the clock is ticking toward your approaching retirement. It’s time to consider increasing your contributions to maximize your retirement savings. Whether you have an employer plan, IRA account, or other assets available for growth, you should consider your last decade of employment as an opportunity to build your retirement funds.
Don’t Wait to Start Saving for Retirement.
Building a comfortable retirement plan begins with demystifying what retirement plans are. Federal employees can particularly benefit from a federal employee thrift savings plan. The more you understand your options and the components of retirement plans, the better position you’ll be to make the right decisions about your post-employment life.
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