Top 10 Retirement Savings Tips You Should Know
Top 10 Retirement Savings Tips You Should Know

Top 10 Retirement Savings Tips You Should Know

Retirement planning can be frustrating, scary, and overwhelming. That’s why it’s crucial that you are aware of the best retirement savings tips when planning, investing, and saving for retirement. You want the greatest results when you decide to retire!

Some of the key things you should be doing at any age include retirement planning, investing in stocks, and contributing to a 401(k) plan. All of these will be things you do to focus on your future as you invest for retirement.

You want that nest egg to be as big as possible. That means it’s time to sit down and look at your financial options for your future now.

Top 10 Retirement Savings Tips You Should Know

1. Plan ahead.

Did you know that many people enter retirement early? Unexpected things happen, and people end up retiring early without that intention. Think about the COVID pandemic and how it has affected the job market! Many people were without jobs or the right skill sets for the jobs available for long periods of time.

According to one study, over half of retirees are leaving the workforce earlier than planned. Many retire at age 50 or younger, rather than starting at age 65!

What does this mean for you? It means you need to consider the possibility that you may be entering retirement sooner than anticipated. The reasons for this are nearly endless but think about possible illness, lacking the right skills for the job market, or layoffs.

Think about how your current retirement efforts are helping you plan for the event of an unexpected early retirement.

What if you retire at the target retirement age? How are you currently saving for retirement? Start planning today. It’s better to be prepared than to end up retiring without enough funds to live the lifestyle you so desire.

2. Set realistic goals.

Remember that everyone has different wants and needs. If you are planning to retire with a house on the beach and a nice car, but you do not currently live with that sort of lifestyle, how are you going to pay for it all? It’s nice to dream, but remember that you can only do so much! Don’t create unreasonable expectations based on fairy tales!

A smart way to plan for retirement and set realistic goals is to create a reasonable budget. Decide how much you will need each month for normal expenses, such as cable, internet service, cellular phone service, utilities, rent or mortgage payments, automobile loan payments, and other related expenses.

Decide how much money you will need to be able to pay for variable expenses like food and entertainment, as well. Once you have your expenses budgeted and lined up correctly, you will be able to determine how much retirement income you will need to live the sort of lifestyle you would like to live.

If things seem bleak or unattainable, reevaluate your current circumstances – your investments, employment, and expenses. Think about what tax bracket you will be in when you retire; speak to a tax consultant about that. Also, don’t forget about unforeseen expenses like long-term care or other medical expenses.

3. Think about an IRA.

IRAs can offer enormous tax breaks, so they are definitely worth looking into as you consider where your income will be coming from during your retirement years. A traditional IRA may offer you tax-deferred benefits, which means that you will only pay taxes on investment gains when you withdraw funds.

A Roth IRA allows you the opportunity to withdraw funds tax-free. You pay taxes on the funds when you make the contributions, rather than the other way around. So, when deciding on which IRA is best for you, decide when you would rather pay taxes on your contributions – now or later.

4. Invest in a 401(k).

If you have never looked into a 401(k) retirement plan, now is the time. 401(k) contributions are tax-deductible, meaning you can take them off your taxable income on your annual tax return. Plus, contributions to a 401(k) plan provide you with savings that you will be glad you have once you decide to retire.

Most companies match a portion of their employees’ 401(k) contributions, too, so you might be able to get even more money in your pocket that way! It’s often a smart idea to contribute the maximum allowable amount to a 401(k) retirement plan, as this will benefit you greatly in the long run!

Talk to your human resource department to see what your employer offers in terms of investment options. Is there a contribution limit with your 401(k) plan?

5. Your assets are critical.

When you decide to invest in stocks and bonds, you typically have options. You are often able to plan your portfolio, dividing your funds between different stocks and bonds. It is important that you make wise investment decisions at this point so that you will reap the greatest rewards when you decide to retire.

6. Consider investing in stocks.

Stocks are a great long-term investment because they offer higher returns over long periods of time. You might be able to earn more money by investing in the right stocks. With the right stock options, you might be able to grow your retirement savings quicker than inflation, which is very important since inflation impacts your variable expenses!

7. Be aware of bonds.

At any point in time, bonds can be scary if you invest too heavily in them. Plenty of people who retire stash their cash in savings bonds in hopes of great returns, only to be let down by the results. Inflation usually trumps the growing power of savings bonds, so be conscientious of your investments.

Consult a broker or financial advisor to help you make the best investment decisions so that you can start saving the right way and have good news when you reach your desired retirement age! It’s a good idea to discuss your retirement goals with your consultant and take advantage of all the financial services that he or she offers!

8. When you withdraw funds matters.

Remember that your retirement funds need to last you the entire length of your retirement. You don’t want to act like a lottery winner and spend all your winnings at the beginning of your retirement period! If you are required to go back to work because you spent all your retirement funds too early, you will surely regret your spending decisions.

A wise decision is to draw from your taxable accounts first. This will allow the tax-advantaged accounts the ability to compound for a longer period of time, leaving you with more funds to enjoy during your retirement! Consider working with a tax specialist who does planning during this time to make sure your funds are withdrawn properly!

9. Consider working part-time.

There are many great benefits to working part-time as a retiree. You are able to keep your mind sharp as you use your intellect, and you remain socially engaged as you meet and mingle with new people. As you may have more free time now, you might consider self-employment and/or becoming a freelancer!

Becoming self-employed or doing part-time work can benefit you not only financially but also mentally and emotionally. Increase your intelligence as you learn new skills, keep up with technology, and meet new people along the way. Many retirees find that working keeps them sharp and able to do things for longer periods of time! They enjoy it!

10. Get creative!

As you retire, many options become available that were not there when you were under the thumb of employment. If you let your creative juices flow, you might be surprised at the outcome!

For example, you might have the liberty to move! Consider moving somewhere that has a lower cost of living, like Indiana, Oklahoma, or Kansas.

Many states like this have lower prices on food, housing, and entertainment than states like New York, Oregon, or California. Read more about the cheapest states to live in at the World Population Review.

Another option is to take out a reverse mortgage on your home. This can lead to a new stream of income! You could even turn it into a Bed and Breakfast or rent out rooms to college students who attend school nearby!


Have you enjoyed the top retirement savings tips provided in this article? As you consider what you will do when you retire, you might want to keep these tips in mind, as they will help you make wise choices along the way.

According to Forbes, regardless of your retirement plans, you should account for any social security benefits you will be receiving, do your best to plan for the unexpected, continue to earn some income while you are in the retirement period, and invest conservatively so that you will receive the best nest egg for your golden years!

If you need assistance with the tax implications as they relate to retirement or financial planning, in general, we are here to help! We specialize in financial and tax planning and can help you succeed!

You can trust Indiana’s Tax Expert!


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