10 Retirement Planning Dos and Don’ts

Do you know the most important thing you can focus on to make sure your finances are in good shape today, and well into the future?

Well it’s also the one thing most people fail to plan for, or don’t properly plan for…

Your Retirement. No matter how old or young you are, planning for your retirement before you retire is of utmost importance to your quality of life in the future.

So today I’m sharing my Top 10 Dos and Don’ts to help you get on track with your retirement planning:

Retirement Tip #1 – DO figure out the amount of income you’ll need to live the lifestyle you want to live. This includes all of your retirement living expenses. Expressed as a percentage of your current income, it is wise to plan for a need that is from 50-80% of your income today.

Retirement Tip #2 – DON’T avoid planning for your retirement now, and putting money in savings or investments that will support your lifestyle. Not saving now could put you in a less than desirable situation when you’re ready to retire.

Retirement Tip #3 – DO an inventory of the income you’ll receive in retirement, including social security, pensions, savings, bonds and investment dividends.

Retirement Tip #4 – DON’T estimate on the low end for your monetary needs. This may put you in a position where you run out of money early, or you have to settle for a lifestyle that is less than what you desire. Don’t risk it.

Retirement Tip #5 – DO leverage the right savings and investment vehicles that will produce the income you need. Whether using employer-based savings plans and self-directed plans.

Retirement Tip #6 – DON’T ignore retirement plans and vehicles that are tax-friendly. With a self-directed plan like a Roth IRA, you stand to save on taxes now, but may incur tax liability as you tap into your money. While with other vehicles or choices you may incur taxes up front, but your retirement payment payouts could be tax free.

Retirement Tip #7 – DO manage the amount of stocks in your retirement portfolio in a way that the percentage equals 100 minus your age. Younger investors are fairly safe having more stocks, since over time the values typically grow. While if you’re older, you may want to have more fixed-income securities or bonds, that hold most of their value.

Retirement Tip #8 – DON’T be scared, and invest too conservatively. A financial professional can help you strike a reasonable balance between safety from risk and growth potential.

Retirement Tip #9 – DO know how much you can withdraw and still leave your investments and savings principle largely unaffected. A good rule is to consider limiting retirement withdrawals to 4% of overall fund value.

Retirement Tip #10 – DO save now, today, next month and every month to build your retirement fund. A good goal is to commit to save 10% of your income now, that you put away in investment and savings vehicles.

Follow all the DOs we’ve talked about today, and do your best to avoid all of the DON’Ts I’ve mentioned. And you can set yourself up to live the good life, for a long, long time. While enjoying financial peace of mind.

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