Money can be a difficult issue at any age, but financial
planning is especially important for your retirement years. You will want to
have enough resources to enjoy your time, and to take care of any healthcare
problems or other emergencies that may arise. Of course, financial planning
does not end at retirement—you need to re-evaluate your plan annually.
Fortunately, useful financial tools and other resources are
available on the Internet, in books, and at the public library. A variety of
professionals can also assist in financial planning. Here are some issues you
should consider as you plan for and enjoy retirement.
Know What You Need.
Saving for a long and productive life can be challenging,
but you can and should do it. The first step is to determine how much money you
will need each year to live comfortably. This will require a careful
examination of your income, resources, and expenses. It will also require that
you make decisions about the kind of lifestyle you want throughout your
retirement.
Know What You Have.
Social Security, pensions, savings accounts, IRAs—it all
counts. When planning your financial future, include all sources of income.
Don't forget rental property and bank certificates of deposit. Even your
Savings Bonds count. Read all the statements you receive from your pension
fund, Social Security, 401(k), and IRAs. If you see a mistake or inaccuracy on
any statement, contact the plan administrator and have it corrected
immediately. On March 12, 2014 from
12-1:00 attend the Snacks and Facts to learn more about Social Security
Taxation. The seminar will be held at
the Fairview Heights public Library.
Re-Evaluate Your Financial Plan.
Don't "set it and forget it." A lot can happen
between now and your retirement, as well as throughout your retirement years.
Re-evaluate your retirement savings plan each year to stay on track. You may
want to consult a professional financial or investment planner to maximize your
savings potential.
Increase Your Savings.
If you can, contribute the maximum amount to all of your
eligible tax-deferred retirement savings, including your 401(k) plan and IRAs.
To take full advantage of these tax benefits, you may have to adjust your
spending habits or forego some unnecessary spending, such as weekly dinners
out. But everything you can save during employment will pay off in the long
run!
Track Your Expenses.
Write down everything you spend for three months. Don't rely
on memory (which can be unreliable), but make entries every day in your
expenses journal. When you review your record, you might be surprised how much
you spend on things you really do not need. All expenditures that you can cut
from the "unnecessary" can be added to your retirement fund.
Pay Off Those High-Interest Credit Cards.
Credit cards are incredibly convenient, but carrying debt
from month to month can cost you a lot of money in interest charges. Make it a
priority to pay off your credit card balances every month. When you choose a
credit card, look for one with a low interest rate. It can make a big
difference.
Organize Your Financial Documents.
Do you know where your insurance policies are? How about
your will? Take the time to organize all your important financial documents.
Keep them in a safe place. Let your family members, your legal representative,
or a trusted friend know where they are located and make sure they can be accessed.
Cover Your Healthcare Costs.
Longer life expectancies mean greater chances of medical
problems during retirement. Be sure that healthcare is part of your retirement
plan. Many employers provide health insurance for their active employees, but
fewer and fewer are covering retirees. Medicare coverage begins for most
Americans at age 65, but many Medicare beneficiaries choose to purchase
supplemental policies to cover the gaps. You might also want to purchase
insurance that would pay for long-term healthcare, such as home care and care
in a long-term care facility, in case you experience an extended illness. The
cost of long-term healthcare insurance will depend on your age at the time of
purchase, the amount of coverage you get, and other policy features. Planning
ahead can save you substantial amounts in the future.
Become An Educated Investor.
Get help from a financial professional or consider enrolling
in a financial education class to better understand how to manage your money
for all your retirement years. Books, magazines, Internet sites, seminars, and
classes are available for the financial do-it-yourselfer. You may need to do a
little research, and your local public library is a great place to start. If
you decide you would rather have expert advice, a wide variety of professionals
are available to help you prepare for a financially secure future.
Online Financial Resources
- Administration
on Aging: www.aoa.gov
- American
Savings Education Council: www.asec.org
and www.choosetosave.org
- My
Money.Gov: www.mymoney.gov
- Employee
Benefits Security Administration, U.S. Department of Labor: www.dol.gov/ebsa
- Financial
Security in Later Life: www.csrees.usda.gov/nea/economics/fsll/fsll.html
- Internal
Revenue Service Retirement Plans Community: www.irs.gov/retirement
- Social
Security Administration: www.ssa.gov
and www.ssa.gov/r&m1.htm
- U.S.
Securities and Exchange Commission: www.sec.gov
- Women's
Institute for a Secure Retirement: www.wiser.heinz.org
This was prepared in collaboration with the American
Savings Education Council.
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