No matter where you are in life, retirement should be a part of your yearly financial planning. The earlier you are in your career, the more options you have for developing a comprehensive plan for your golden years. Your retirement strategy should ensure you’re able to live comfortably, regardless of what obstacles you face in the future. You’re not out of options if you’re developing a retirement plan later in life. A holistic financial advisor in Kansas City can help you maximize your savings for your later years while minimizing your expenses. Here’s why financial advisors suggest you start planning for retirement now.
While Social Security provides some additional income during retirement, the average payment is less than $2,000 a month. Social Security alone isn’t enough for most retirees to cover monthly expenses and emergencies or match the lifestyle most retirees hope for during their golden years.
The sooner you start, the better your position is when it’s time to leave the workforce. You’ll be able to supplement your social security benefits with income generated from retirement savings accounts, providing for a secure retirement.
By depositing money from your paycheck, you’re able to take advantage of tax deferment on your retirement accounts. Your take-home will decrease but by less than the amount deposited into your 401(k). When you deposit pre-tax income into your accounts, you defer paying taxes in the short term. You can sometimes avoid them altogether, even after you retire.
Suppose your company offers a retirement contribution matching program. In that case, you can put even more money towards your retirement without costing you more money in the short term.
Compound interest is one of the most significant advantages of starting saving for retirement early. As your savings earn interest, that interest gets added to the account’s principal, allowing you to make interest on top of interest. The potential retirement income becomes substantial as time goes on for extended periods––over 30 years, for example.
Using tax-deferred or after-tax accounts can generate even more money from the income earned via compounding interest.
Even small contributions to a retirement account can generate significant income for your post-work years when you start early. By making a habit of donating 10% of your pre-tax income, your donations will grow as your salary does.
Over decades, you take dual advantage of tax savings and compound interest, leaving you with significantly more money than initially invested. However, selecting the correct retirement accounts and calculating an ideal contribution depends on your financial situation and goals for retirement. A holistic financial planner in KC will build a custom strategy for your retirement planning.
Our team takes a holistic approach to retirement planning. We use comprehensive strategies to ensure you have the resources you need to enjoy it, whether you’re five years or five decades away from retirement. OWLFI is your partner in wealth building for the long term to identify sources of income, maximize savings, and minimize taxes. We’re aware of the disconnect that can occur between CPA, estate planning, and financial advisors. That’s why we bring multiple services together so that all aspects of your financial planning work cohesively for your future.
Elevate your retirement planning by using a holistic approach that maximizes revenue while minimizing taxes. If you’re ready for a fresh approach to your retirement, reach out to our holistic KC financial planners.
