Little things can make a difference, especially when it comes to planning and executing a retirement plan that will give you the lifestyle you desire in your golden years.
Regardless of how close you are to retirement, it is never too late to look for ways to save money while tweaking your portfolio as your priorities change in life and you near retirement age.
Here are some suggestions:
- Delay signing up for Social Security. Most people are eligible for full Social Security benefits at either age 66 or 67, and you can even take benefits as early as age 62, though at a reduced rate. But if you can put off taking benefits even beyond full retirement age, you should. Delaying Social Security until you are 70 can result in as much as a 33 percent increase in benefits.
- If possible, create guaranteed income. If you don’t have a pension, consider setting up an annuity that can pay you a regular dividend. Have some money nested as “safe money” that, while it may not promise outstanding returns in a volatile market, it is safely accruing wealth.
- Develop a plan for long-term care. Long-term care can be one of the biggest disruptors to a successful retirement, but most people don’t prepare for it, which can be a huge mistake financially. To protect the assets you have saved, you need a plan to pay for long-term care, whether it is long-term care insurance or some other method.
- Examine life insurance options. If you purchase a long-term care policy, and you never need to use it, you don’t get anything back. Some life insurance policies have an optional accelerated benefit feature that allows you to use the benefit while you are alive. Life insurance is not right for everyone but some policies allow people to use the death benefit tax-free for long-term care.
- Know what fees you are paying. People don’t always realize that regardless of what they have their retirement savings invested in – mutual funds, 401(k)s, IRAs – they are paying some sort of fee. You need to be aware of just how much those fees are costing you because every dollar that goes to fees is a dollar you can’t use for your retirement.
- Know how your financial adviser is getting paid. Does your financial adviser have a fiduciary responsibility to work in your best interests? Or is he or she simply a salesperson who gets paid by commission? Does your financial adviser get paid more if your portfolio does well? It’s important to know just how your adviser is being paid so that you can rest assured that their advice is producing the greatest advantage for you.
Remember, the earlier you start taking your retirement seriously and start tracking your progress, the better off you will be.
Zach Gray has worked in the insurance and financial services industry for over a decade, leading a captive insurance company for several years, and now as an independent financial planner. He is a partner of Wall Street Financial Group.
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