If you get a significant cash windfall, such as a tax refund or bonus check, consider using some of it to boost your retirement savings. This will help you avoid paying unnecessary taxes in the future. Estimate your desired lifestyle in retirement and set financial goals based on that. For example, you can buy a vacation home or travel frequently.
Invest in Your Future
One of the best things you can do to ensure you’ll have enough money to live comfortably in retirement is to start preparing with Boeing retirement plans and investing in your future. Investing your earnings in a combination of stock and bond mutual funds will help you build an adequate portfolio that can grow throughout your retirement. Creating a budget will also help you determine how much you’ll need to save to enjoy your golden years. Start by tabulating your regular spending using year-end summaries from credit cards or online bank statements, and then compare that to what you expect will be your costs in retirement. The amount needed for retirement varies by individual, but many financial professionals recommend setting aside three to six months for living expenses. You’ll need this money in retirement to cover food, housing, and utilities expenses. Other everyday expenses in retirement include clothing, healthcare, and travel.
Create a Budget
Having a solid budget before retirement is essential; determining your average expenses is the best way to start. You can do this by looking at year-end summaries of your credit cards and online bank statements to see where your money is going. Once you have a list of your typical expenses, it’s time to categorize them. Start with essential costs such as housing, food, and transportation. You should also factor in insurance premiums, debt payments, and family care expenses. Finally, include a “shock” category for unexpected events like a major health issue or unavoidable home repairs. Many financial experts recommend putting aside an emergency fund equal to three months of living expenses.
Take Advantage of Your Employer’s Matching Contributions
If you work for a company that matches your 401(k) contributions, take advantage of it. It’s free money, and you’ll only be a few minutes away from having an extra buck or two in your savings account. Employees can choose between a lump sum and a lifetime stream of monthly checks in many defined-benefit pension plans. The actuarial calculation of what lump sum amount is equivalent to a lifetime of monthly payments adjusts each November based on interest rates. Choosing a lump sum is an attractive option during this time of low-interest rates, but be aware that it’s not guaranteed to grow at the rate you need. Ultimately, most experts agree that you should try to save 10% of your salary toward retirement — though this will vary widely depending on your financial situation and goals. Keep an eye on your accounts, and don’t forget to check in with a financial advisor every year or so.
Pay Off Expensive Debts
As you get closer to retirement age, paying off expensive debt can help you have more income to spend. You’ll also save on interest payments, which can make a big difference over time. Ideally, you’ll have enough savings to cover the bulk of your expenses in retirement. That includes healthcare costs, which are likely to rise as you age. You may want to consider supplemental health insurance coverage or long-term care insurance. Work with a financial advisor to understand your goals and create a plan for the future. Thrivent financial planners can provide one-on-one investment and retirement services tailored to you. Start by reviewing your current assets, such as investments and bank accounts. It’s also good to compare your savings and spending habits against your goals. Then, make any necessary changes to your budget and financial planning strategy. You can also put any cash windfalls (like a tax refund or bonus) toward your retirement savings to reduce your taxable income.