You might not quite be ready for retirement at the moment, but there’s no time like the present to start preparing for your future. The sooner you start saving for retirement and ensuring that you’re taking the right steps, the better.
Here are five tips for 2020 that you’ll want to be mindful of:
Use this time to invest your money into a wide range of different stocks, as this can help reduce your risk while the market is so volatile. This will up your chances of having at least some of the stocks perform better than others, even if others don’t do so well.
Recent downturns in the market means a lot of Americans are now behind in their retirement savings. Luckily, if you’re aged 50 and over, you are eligible to make catch-up contributions to your 401(k) and/or IRA if your income allows for it.
Your balance might look high enough when you estimate the amount of your retirement balance far into the future, but you also need to keep taxes and inflation in mind.
For example, if your retirement balance is expected to grow in 30 years to reach $1 million, you’ll need to adjust that amount for inflation. That $1 million adjusted for inflation might be worth $402,032 instead.
Where you live can make a huge difference in how much money you’re able to save toward retirement. The same holds true for where you plan to live when you do retire. You should always take both your present and your future into account when it comes to retirement savings.
You’ll want to especially pay attention to investment fees you’ll be charged, and that’s true whether you’re choosing funds to invest in, or picking a brokerage firm.
You’ll want to keep the fees as low as possible as they can make a huge difference in the long run, and you could potentially lose hundreds of thousands of dollars over time.
If you take the time to plan ahead and try to follow some of these tips, your financial future can look much brighter, no matter what might lie ahead. The last thing you’ll want is to be short on funds when you’re no longer able to work.