Talk to a debt counselor toll free:800-300-9550
Our Clients Rate Us Excellent
Based on 3234 reviewsTrustPilot Reviews
Before you start looking forward to a good retirement, you might want to take a look around you first. This is especially true for those of you who are about to retire. Even if you are about to leave the workforce, you have to concern yourself with what is happening in the economy. It is currently not the best to retire in but you know that you have to find a way to survive it.
Fortunately for you, there are retirement tips that will help you live a comfortable life despite the shaky economy.
How to prepare for retirement with an unstable economy
Let us begin with what you can do before you retire. If you know that the economic conditions by the time you retire is not the best period, then you need to make a couple of preparations. There are a couple of retirement tips that you can follow to make the best out of this situation.
Maximize your 401(k) contributions. If your employer matches what you will give, then you need to concentrate on putting in as much money as you can here. Since the money that you will put into your 401(k) is before taxes, that will make your taxes smaller. As your retirement fund grows, it is tax free so you can really take advantage of that. There is also a “catch up contribution” that the government allows for those who are 50 or older. You can contribute up to $23,000 a year on your 401(k) funds.
Consider contributing to Roth IRAs. This is another retirement fund that you can grow. The difference with the 401(k) is you will contribute to this after taxes. However, it also has a tax free growth and not only that, withdrawals will not be taxed. The 401(k) withdrawals are taxable. Since taxes usually rise over time, you will get more out of Roth IRAs.
Pay off your debts. Another thing that you can concentrate on is paying down your debts. This is very important because you don’t want to share your limited retirement money with debt payments. If you still have mortgage payments, you may want to consider downsizing in retirement. That way, you can sell of your bigger house, and buy a smaller and cheaper home. For your credit card debts and other unsecured loans, you can enrol in a debt relief program that can help you get out of debt in 5 years or less.
Increase your Social Security benefits. There are couple of ways that you can increase your benefits and you may want to give some thought to that. For instance, you can work longer hours so your pay will be bigger - that will increase your contributions. You can also opt to withdraw your benefits late so you get bigger monthly benefits.
Stop acquiring debt. Another important tip is to just stop acquiring debt. Just pay in cash and refrain from racking up any more credit card debts. You are just wasting money on interest anyway.
Tips to keep your retired life comfortable despite the economic conditions
Even when you have followed these abovementioned retirement tips, you still need to plan what you will do once you enter retirement. Here are a couple of things that you can do.
Try to find part time work. Not everyone who is retired really like to lounge around everyday. It gets boring. Beside, lack of physical and mental activities can really lead to a faster deterioration of your health. So might as well find something that can occupy a few hours of your time each day. Why not try an online job or pursue a hobby of yours that you can capitalize on? Of course, working in retirement would mean you have to pay taxes and other stuff so try to research about that.
Simplify your life. One of the best retirement tips that you can get in this tight economy is to just live a simple life. You don’t need too much items or gadgets in your life. Also, you need to consider the vehicles that you own. When you downgrade your home, make sure you simplify it as well.
Develop your skills. When you have limited funds, it is very helpful to learn new skills so you can cut back on some expenses. For instance, now that you have so much time in your hands, why not try to learn how to garden? You can grow your own produce and that will slash your food and grocery bills. Learn how to cook or bake from scratch. These are some of the things that you can do in your spare time.
Take care of your health. Since you are not as robust as you used to be, it helps to take care of your health to keep your medical expenses low. The medical related costs right now are still going up, and you may want to stay out of unnecessary health fees. Live a healthy life and take care of your body.
It’s really hard to say when the economy can improve as it can go down just like that. All you can really do is to prepare for it and you should be able to live a great retirement.