Whether you’ve already claimed Social Security benefits or are starting to think about utilizing a Social Security claiming strategy, start here with this checklist!
1. Max Out Your 401(k)
If you’re in the latter stages of your career, you probably are in your highest-earning years. If your employer offers 401(k)s, make sure you take advantage of catch-up contributions as well as an employer matching policy.
2. Rethink Your Portfolio Allocation
Retirement account holdings often make up a considerable portion of people’s retirement savings. It’s important to consider your financial goals and ask if your investments meet those goals. When you’re 55-65, are you looking for capital appreciation or safety and income? Make sure your investments reflect your answer to that question.
3. Open an IRA for a Savings Boost
IRAs are individual retirement accounts and are not tied to your employer. So, while you will rarely ever get a matching contribution from your IRA issuer, you will still be able to save more of your income per year if you’ve already maxed out your 401(k) contributions.
4. Remember Pensions and Social Security
Before making any changes to your savings plan, remember to calculate what your expected Social Security or pension benefit may be. For example, for Social Security, there are unique factors that determine how large your Social Security payments will be, such as the age at which you claim, the highest-earning 30 years of working income you have, and your expected supplementary income levels.
5. Don’t Make Withdrawals Just Because You Can
Once you turn 59.5, you can make penalty-free withdrawals from retirement accounts such as 401(k)s or IRAs. However, withdrawing as soon as possible could result in the early depletion of funds. So, make sure you create an income timeline and stick to it.
6. Consider Your Tax Burden
Taxes are expenses worth considering in retirement. Because you pay yourself in retirement, turning your savings into income means portions of your hard-earned savings go to the government. Even some of your Social Security benefits can be taxable! So don’t forget to factor in your tax burden.
Source: https://www.investopedia.com/retirement/top-retirement-savings-tips-55-to-64-year-olds/
Bob has a passion for making your money work hard for you. He takes profound joy in ironing out a plan for a long and comfortable retirement, no matter what your current income or level of wealth. With a work ethic second to none, he has a zeal for transforming uncertainty into stable ways for you to protect your future and your family. He knows that the quality of your life you enjoy today can remain as rewarding—or even better—after retirement.
With a strong background in information technology, Carol is instrumental in building operational policies and strategies that keep the organization functioning smoothly. Carol’s organizational skills and her flexibility to jump from priority to priority along with her commitment to customer service makes her an essential part of the Grimard Financial team. When Carol is not working with the Grimard Financial Family, she is a very creative and accomplished photographer.