Retirement preparations vary depending on your age and life circumstances. However, there are certain key areas that everyone needs to work on in order to achieve an optimal retirement.
Even if every situation is different, there are some key elements that apply to every single retirement plan that are within everyone’s reach. Let’s have a look at these areas:
1. Social Security Benefit
A very common question is when to start collecting Social Security benefits. If retirement is still far away from you, let’s say you are in your 20s up to mid-30s, all you should be doing right now is monitor your Social Security records and pay attention to how work history impacts on your benefit.
If you are between 35 and 49, you should start tracking your career and see if there were any gaps that could impact on your Social Security Benefit and retirement contributions. If you are 50 or older, start thinking what your optimal retirement age and calculate if you should start collecting the benefits immediately after you retire or if you will be able to wait a few years.
Another common question is “how long should I work before retiring?” Early in your career, your aim should be to work until you reach your full retirement age, but as you move up the ladder, your focus should be navigating the corporate world to build strong business relationships and improve your income status.
You can start seriously thinking about retirement age by the time you reach 50. Analyze your savings, your career and determine your transition strategy.
3. Savings and Investment
The sooner you start investing, the better. This will give you more time to build wealth and enjoy the benefits of compound interest.
As you grow older, you should adjust your portfolio. It is really important to make sure it’s always balanced and performing well. The key to a healthy portfolio is diversification.
Identifying your life stage and adjusting your plans accordingly is the best way to make the most out of every period of your life. Wealth is something that is built through time, so you need to start taking steps as early as you can.
Don’t be afraid of adjusting or making changes to your savings plan if you notice room for improvement. This is the key to reaching an optimal retirement!
3 THINGS TO CONSIDER ABOUT YOUR RETIREMENT STRATEGY BY THE TIME YOU TURN 50
Turning 50 is a big deal! And it’s also a perfect opportunity to start rethinking the way you’ve usually done things. Especially, when it comes to your financial strategies. Many financial advisors say that by the time you turn 50, you should consider changing these three things:
1. Track down all the accounts you’ve opened over the years
We rarely work at just one place throughout our active years, so by the time you are 50, it is a great opportunity so sit down and check how many accounts we have opened. We might know exactly how many of them we actively use, but you never know if you missed one.
Gather up all of your accounts and take the time to think If you need them or not. Compare what they offer and decide which one stays and which one goes.
2. Instead of focusing on accumulating, focus on cutting costs
By the time you turn 50, you have already spend a long time saving aggressively. So, instead of continuing down that road, it is a good idea to shift your strategy and instead of figuring out ways in which you could accumulate more wealth, start figuring out strategies that will allow you to cut your spending and use your money in a way that will give you peace of mind.
Take a look at your expenses and lifestyle to fit the savings you already have. While investing is always recommended, even during retirement, you should make sure you review your numbers and see if you find room for improvement.
3. Consider investing in a more conservative way
Related to what we mentioned on the previous point, investing is something you are likely to maintain throughout your life, whether you are retired or not. But experts consider it is a good idea to change the approach you have towards investing. If your plan is to depend on your savings and investment years during your retirement, then you are probably not willing to risk it all.
After turning 50, it might be a good time to evaluate your asset allocation and rethink your portfolio so you make sure it is safe and protected against inflation.