Tips On Funding A Healthy Retirement
Many of us rely on our jobs to provide income for the things we need. Though planning on funding your retirement begins early in life. As we start considering retirement, though, we have decisions to make. How will we replace the income we received from our jobs? Strategies may include a careful blend of lowering expenses to stretch our savings.
Social Security Benefits
It’s possible to start claiming social security benefits at age 62. However, holding off a few years could result in a significant increase in payments. When you’re funding your retirement, explore all factors before electing to receive your benefits.
Consider moving to a smaller home to save money and increase cash reserves. Review capital gains rates before selling, though, to make sure it’s the right move for you. For some homeowners, a reverse mortgage can provide much-needed money for retirement.
You may also want to explore moving to an apartment and renting your home to increase your income. This may be riskier than other solutions, because of the expense of maintaining the rental property.
Only a small percentage of retirees currently use annuities. However, it’s possible to use annuity payments to bridge the gap between Social Security payments and actual expenses.
401(k) and Other Workplace Retirement Plans
If you’re age 50 or older, you can deposit up to $18,000 per year plus $6,000 in catch-up contributions. Take full advantage of matching employer contributions also.
Individual Retirement Accounts (IRAs)
Contributions made to your IRA are tax deductible. At age 70 ½, you’ll start making mandatory withdrawals that are taxed at your normal income tax rate.
Though similar to other IRAs, withdrawals from Roth IRAs are not taxed. Account holders are not required to start taking withdrawals at a certain age when funding your retirement.
Some people may benefit from staying in the workforce a few years. They can increase savings and contributions to funding your retirement and give their current accounts time to grow. If full-time work is not an option, consider part-time just to supplement income. Just make sure your part-time income does not impact your other benefits, like Social Security.
Ready to Talk About Estate Planning?
At Keystone Law Firm, we work tirelessly to help our clients plan for and enjoy their retirement years. Call us at (480) 418-8448 or use our convenient Contact Form. You can also check out one of our free seminars.