You’ve spent most of your life working hard and building a nice little nest egg for yourself and your spouse, and now the time has finally come. Retirement is on the horizon, and you’re now starting to seriously consider how you want to navigate the next stage of your life. This is both an exciting and somewhat overwhelming time for many people.
That’s understandable because there are numerous strategies available for how you should divest your portfolio and maximize all of the available benefits. Luckily, you don’t have to go it alone. The talented retirement planning advisors here at OWLFI have the experience and insights you need to have confidence as you start the journey into retirement, and it all begins by taking the following considerations into account.
Helpful Advice to Remember When Considering Retirement
You need to create a realistic retirement plan.
Thriving in retirement rather than merely surviving it requires strategic, long-term planning. That’s why our retirement planning advisors were surprised to learn that in the 2020 Retirement Confidence Survey, only 48% of workers said they have tried to calculate how much money they’ll need when they stop working. This is a crucial step to a successful retirement, because it gives you a goal to aim for and helps determine the best strategies you should take. If you’re seriously considering retirement, you need to crunch the numbers now to figure out how much money you’ll need to live comfortably. Factor in everything from your current assets, future benefits, medical costs not covered by Medicare, and any upcoming life changes such as moving.
Understand the retirement account catch-up strategies.
It’s best to contribute to 401(k)s or IRAs as early in your career as possible to maximize your savings for retirement. However, not everyone can afford to do that earlier in life, but there are solutions in place to help you catch up. Both types of accounts have a limit on how much you can contribute each year, but those amounts change once you turn 50. At that point, you’re eligible for “catch-up” contributions. Rather than being limited to $19,500 per year for IRAs and 401(k), you can add up to $26,000 if you’re over 50 to help bolster your savings as you get closer to retirement.
Take advantage of different social security strategies.
You’ve been paying into this system your entire professional life, and the right social security strategy can help you maximize your return. While everyone’s financial situations are different, there are certain strategies you can employ to get more out of your social security payments. One commonly used one is simply delaying your benefits. Today, most people are eligible to start receiving full Social Security benefits at 66, which is the full retirement age (FRA). However, you could earn an additional 8% return annually up until the age of 70 if you wait to start your benefits. That means if you are eligible for $24,000 per year at age 66, that amount could increase to $31, 680. Depending on the current cost-of-living adjustments, your benefits could grow even more. Working with a qualified retirement planning advisor can help determine the best strategy for you.
Are you starting to think about retirement?
Then let our team of experts at OWLFI help find the optimal strategy for you. Our full staff of professional CPAs, attorneys, and financial advisors can identify your sources of income, bolster your savings, and shield you from taxes. We focus on long term retirement solutions to develop a plan designed around your specific needs and goals. Schedule a consultation with our retirement planning advisors and learn how we can give you confidence in your retirement strategy.