The balance of your retirement account is probably not what it used to be. In fact, looking at that number can instill a sense of misery and fear in the account holder. Retirement is becoming less of a given, and closer to an unattainable fairytale we seem to have no chance of reaching in the current economic state. So how does one prepare for retirement when the economy is suffering?
Determine Your Future Needs
Preparing for any event requires a good plan of action. If you aren’t sure how much money will be adequate for retirement, begin by assessing what your future income and expenses will be. Find out what your life expectancy is and use a retirement calculator to aid you in projecting your needs. Those numbers will serve as a starting point as you plan for life after employment.
Save, Save & Save
Money may be tight, but saving has become more important than ever. There is no way to predict what your situation will be years down the road, so accumulating cash now could save you in the future. Don’t tell yourself you can’t afford to save money, either. Studies show that Americans actually save more money during tough economic times. The sooner you start depositing, the longer the period of time your account has to grow in interest.
If your employer offers a 401(k), IRA or similar retirement account, and they most likely do, simply have a portion of your check automatically deducted and deposited every pay cycle to take advantage of the tax-free income. Many employers also offer a match to your contribution, so why not earn the free money while you can?
Hire a Financial Planner
None of your investments will do you any good if they aren’t properly managed in the years to come. Financial planners possess a wealth of knowledge regarding accounting, marketing, economic trends and more. Hiring a professional to look over your portfolio and make suggestions as to how you can better prepare for your retirement is well worth the money.
However, be sure you are working with someone who has your best interests in mind. If you’re not sure where to start, ask for recommendations from trusted friends and family members. Then, always check a professional’s credentials, references and know how they get paid. Fee-only financial planners are not swayed by commissions that can present a conflict of interest when the adviser stands to profit by recommending particular investments.
Consider Delaying Retirement
Working past retirement age can actually be good for your health. The New York Times reported last October that “researchers from the University of Maryland found that men and women who kept working after retirement had fewer major diseases or disabilities than those who quit work, according to the study published this month in the Journal of Occupational Health Psychology.”
Just because you have the option to retire early doesn’t mean you should. The later you retire, the less you will need to rely on the money you have saved and Social Security benefits (if there are any). Or, if you do choose to retire, consider maintaining a part-time job that is fulfilling both mentally and financially.
In the end, preparing to retire when the economy has taken a downturn can be tough, but it’s not impossible. There are long-standing financial practices that have always worked and will continue to do so well into your golden years. As long as you live within your means and always plan ahead, you should be able to comfortably retire when the time comes.
This guest post was written by Go Banking Rates, bringing you the best interest rates on financial services nationwide, as well as informative content and helpful tools.
