When is the best time to start planning for retirement? Now! It’s never too early or late to incorporate financial decisions that can positively affect your golden years. Maggi Tax shares the five things that you can do today to start planning your retirement.
- Contribute to a retirement account
Are you taking part in your company’s employer 401(k) plan or contributing to a personal IRA fund? Most companies offer matching contributions but to maximize your retirement savings, make sure to contribute at least the minimum amount so as not to leave money on the table. Any deductions made to this account are pre-tax which can reduce your taxable income. If your employer doesn’t offer a 401(k) plan, Maggi Tax can help you identify other fund types like Roth IRAs, and Simple or SEP funds that may work for your financial goals.
- Optimize your healthcare expenses strategy
Opening a health savings account (HSA) is a great way to save for any future medical expenses after retirement. Keep in mind that an HSA can be rolled over every year and is not the same as a healthcare flexible savings account. Many employers also offer contributions to these accounts and any contributions made are also tax-deductible.
- Invest appropriately
A common investment rule states that you can tolerate riskier investments when you’re younger but with age, you should shift to more conservative (and dependable) investments. Our team of professionals can help identify a combination of targeted portfolios that will help you achieve your retirement goals.
- Review any Social Security
In most cases, Social Security benefits do not fully cover monthly benefits so it’s important to review any projected earnings early. You can begin collecting benefits as early as 62 years old but remember that they will be at a reduced rate. Set up an account on the official Social Security website to correct any errors and review your account, as they may negatively affect future benefits.
- Prep a budget
Financial advisors generally recommend saving 70% to 90% of your pre-retirement annual income. For example, if you earn $100,000 annually then plan to save $70,000 to $90,000 multiplied by the number of years you will be retired. There are many factors – age, rate of return on investments, lifestyle – to consider when calculating a retirement budget. Working with a trusted financial advisor can ensure that all-important factors are included.
For over 30 years, Maggi Tax has guided Tampa Bay residents with all aspects of their financial well-being. Our goal is to implement customized financial plans that preserve and maximize your wealth management needs. Contact us here or call (727) 799-1701 to schedule your appointment today.