Here are the top 5 strategies anyone can use to help prepare him or herself for retirement regardless of what may lie between here and there.
1. Do Your Homework & Talk to the Experts
The first step is simply to start doing as much research as you can on strategies others have successfully used to prepare for their retirements. This may involve online research, reading some helpful books and booklets, and talking to others who have already retired or who already have a retirement plan in place that seems to be working.
But it should also include consulting with professionals who specialize in preparing others for their golden years. After all, those who deal in these issues day in and day out are going to have some key pointers and sound advice to give you.
2. Calculate How Much Retirement Income You Will Need
No one knows exactly how long they will live or how many years they will live out post-retirement. But you can make a good, educated guess and plan for more than enough income. Many people mistakenly think Social Security will be enough – but it almost never is. And many people these days live 15, 20, or more years after retiring.
You may have lower expenses during retirement if you move to a smaller house and no longer have expenses like putting the kids through college, but there may be added expenses too, like higher medical bills. It’s best to plan on your current level of income times at least 20 years.
3. Plan For Multiple Income Streams
Planning for retirement includes but is not limited to investment accounts. It’s best not to risk putting all your financial eggs into a single basket. One of the ways to make retirement income safer is by diversifying it into at least several income streams.
Social Security benefits, IRAs, 401Ks, fixed index annuity accounts (which can be outfitted with a lifetime income guarantee rider), stocks and bonds, and other investments can all play a significant part in your plan.
You may also want to plan on working part-time for at least a portion of your planned retirement years. And if you have a pension plan, that’s yet another key income source to count on.
4. Make Healthcare Costs A Part of the Plan
It’s a well-known fact that one’s later years are the most costly when it comes to healthcare expenses. Thus, it behooves one to include a healthcare plan as part and parcel of their overall retirement plan.
Health insurance, health savings accounts, Medicare and/or Medicaid benefits, prescription drug plans, and many other options are available. Talk to both a health insurance expert and a retirement planning expert, then coordinate their advice.
5. Include Life Insurance in Your Plan
Almost everyone would do well to purchase some form of life insurance. And the younger and healthier you are when you sign up for a life insurance plan, the better rate you are going to get for years to come.
A guaranteed benefit can be had with whole life, though the premiums will be higher. Universal life adds in some kind of investment earnings. And term life gives you coverage during critical years at a lower cost per month.