Cashing In: How to Reap the Rewards of Your Investments in Your Golden Years

To live comfortably in your golden years, it's best to make smart decisions early in life. Many pathways can lead to success in retirement, and you may need to seek advice from a financial planner to get on a good course and keep moving forward. 

Here are four pieces of advice to ensure you reap maximum rewards when you reach your golden years.

Start Early

When you start saving early, you can benefit from compounding interest for years. When you invest early and continue no matter the economic climate, you can benefit from dollar cost averaging—investing a fixed amount regularly rather than trying to find the perfect time to invest. 

Starting early also means your portfolio has time to recover from any mistakes you make. Save and invest as much as possible, but never use a credit card for investing because the return may not exceed the interest you pay.

Diversify

Sometimes, specific sectors of the economy fail while others continue to do well. Some investment products weaken or fall out of favor over time too. 

When you diversify your investments, you invest across a range of industries and investment types to make sure that failures don't have too much of a negative impact on your retirement funding. 

Investment diversification is a risk management tool that prevents you from being exposed to the full volatility of an investment type or industry.

Consider the LTSE

The LTSE (Long Term Stock Exchange) is a new national securities exchange focused on long-term investing. Some financial planners may not understand the LTSE if trained several years ago. 

Proposed in 2011 and launched in September 2020, the LTSE is an SEC-registered platform that trades stock in companies focused on long-term success for stakeholders. Businesses listed on the LTSE also commit to a list of sustainable and inclusive business practices.

Eliminate Debt

Your financial plan can fall apart if you must make large debt payments in retirement. As your golden years approach, focus on eliminating as much debt as possible to reduce the amount of income needed for monthly bills. 

Pay off credit card debts first because they can have the highest interest rates. Paying old debt in retirement means you may not have the money for traveling and other retirement activities.

To make a retirement plan that works for you, consider all your options and get help when needed to ensure that your choices are the best. When you make a plan that includes maximum savings and a smart range of investments, your golden years can be your best.

What Is the Ideal Breakdown Between Expenses, Savings, and Investments?

If you have a steady income that more than covers your monthly expenses, you should be planning a financial future. Experts recommend balancing your income between monthly expenses, short-term or emergency savings, and long-term investments. The following ideas might help you to get started.

Expenses

These typically include your household costs each month, such as rent or mortgage payments, utilities, transportation, food, insurance, and medical care. 

You may need to include fluctuating expenses like school tuition, clothes, and entertainment. Financial gurus estimate that up to 80 percent of your income might need to be allocated to this part of your budget. 

Home maintenance and car repairs might fall into this category, although some people consider them part of a short-term savings plan or emergency fund.

Savings

Everyone needs a savings account to cover unexpected costs like replacing a home appliance that goes bad or paying for pet surgery. Short-term, occasional needs like birthdays and holidays might also draw funds from your savings account. 

Vacations, special purchases (like a great deal on a home freezer), or helping a family member through a financial setback are other uses for this fund. In addition, you should save approximately three months to six months of your current income in case you lose your job or have an accident that requires long-term convalescence when you can't work. 

You may want to save about ten to twenty percent of your monthly income if your household expenses average 70 to 80 percent.

Investments

An investment plan can start small and maintain a conservative pace with low risk. Talk to a financial adviser and carefully review stocks of interest to decide where to invest about 10 percent of your monthly income. 

You might also want to invest in windfalls like a job bonus or cash birthday gifts to grow your account more quickly. Stocks will rise and fall, so be prepared to be patient over the long haul.

Credit Unions

Coordinating your budget might seem challenging as you try to juggle these three components. Consider joining a credit union where member benefits are often stellar. 

You can expect prompt, friendly, professional service on a smaller scale that is more personal than what is typically experienced at a local bank. 

Members can get financial advice and guidance in establishing a budget that won't crimp their lifestyle or compromise their future. Interest rates are competitive with and sometimes better than a bank's rate, especially when promotional opportunities are offered.

Make the most of your money for current, occasional, and future expenses. Get professional advice and set up a budget that will financially protect your family and interests.

How to Save Money and Plan for Your Financial Future

Living from paycheck to paycheck is a leading cause of stress among much of the population. There are surveys that indicate nearly 50% of Americans would have trouble coming up with the money to pay for a $400 emergency.

This is not a good recipe for financial success. That's why saving money is so important.

Make Saving Automatic

David Bach popularized the concept of the latte factor, which suggests cutting out mindless spending to build wealth over time. While that is perhaps his most famous recommendation, he also encourages people to make their savings automatic. 

Signing up for automatic withdrawals to a savings or investment account is a great way to make sure the money actually gets saved. 

People who wait to save what's leftover at the end of the month generally have no money left over to put toward their long-term goals. Therefore, paying yourself first is a necessary step to start building some savings.

Consider a Credit Union

When most people think of where they might put their savings, a large commercial bank might come to mind. However, credit unions are also a great option. 

Some companies, like Credit Union of Denver, know that these financial institutions run just like a bank. They offer loans at competitive rates, and they also have accounts that allow for savings and investments. 

Sometimes, these accounts come with better interest rates for savers. Members run credit unions, rather than shareholders who may or may not use a commercial bank's services.

Track and Trim Expenses

Many Americans spend mindlessly. Sure, there are bills that you'll have to pay monthly that stay relatively stable. These include things like rent, car payments, and food. 

There are other expenses that are completely unnecessary. Going out to a movie theater every weekend and eating out for lunch every day can get expensive. 

Tracking these expenses and trimming them back a little could put $100 or more back into your budget every single month. Over time, what might not seem like a huge sum of money could grow into a significant nest egg.

Make More Money

There are several options for making more money. The easiest might be simply asking for a raise. It can also pay to do a bit of job-hopping. 

Sometimes, switching employers can lead to some pretty hefty pay increases. Another option is starting a new side hustle that can bring in a few bucks. 

Over time, a side hustle might turn into your primary income, which means that it doesn't hurt to start one.

Putting some money away for emergencies or for the future is key to your financial health. That's why it's important to make savings automatic. 

Taking these tips into consideration can be a great way to increase your financial freedom over time. The earlier you start, the more likely you are to succeed in stashing some cash for your long-term goals.

8 Things You Can Do Today to Stop Stressing About Money

According to the APA (American Psychological Association), 72% of adults suffer from financial stress. Being anxious about finances is absolutely natural.

You will be thinking about it whether you have a lot of money or not. The stress could be related to rent, loans, savings, taxes, and much more. The financial stress makes you reconsider everything from crucial expenditures to occasional splurges. 

Whether you decide to spend money on groceries or decide to enjoy an exciting day in the escape room, it all leads to anxiety and stress. as well.

Monetary stress has too many downsides like poor sleeping habits, stress ulcers, decreased immunity, and depression, to name a few. Although advice cannot remove all the stress about money, some careful and quick strategies might come in handy while you are stressing about money.

1. Start a money journal

The first and foremost thing to do is to keep a journal. Any financial planning must start with a journal. According to a study, journaling your issues before getting into budget planning reduces stress by a lot. So, if you are stressed about your problems, put them down in words first. This will give you a clear idea of what your concerns are.

Next, go through the concerns one by one and categorize them based on priorities. For example, is your immediate concern paying off loans or balancing your credit score? Are you worried about emergency funds or retirement plans?? Note these concerns down from most important to least.




After categorizing them, make another list to break down the steps you need to handle the money accordingly. Finally, you can get down to business and start following your carefully laid down steps.

2. Plan a Budget

Planning a budget will reduce a lot of stress about money. This is also connected to journaling. Planning a budget will help sort your finances well. It will help you reanalyze a lot of expenses you make.

If you discover you are spending more than you earn or spending unnecessarily on something, budget planning is going to be your friend. Starting a budget will help you in tracking all those expenses and help reduce certain expenses so that you can save more or pay off those loans.

Start by fixing an ideal budget based on your earnings. Categorize your necessary and luxury expenses. Then you can carefully increase or decrease your input into different categories.

The best way to go is to download an app that keeps track of your budget and the expense you allotted to each category. Most of these apps will provide you with regular reminders and emails in case you fail to follow the budget.

3. Examine Your Accounts

When you are planning your budget, you must re-evaluate your expenses. And how to do that?? Look into your previous transactions. Sort them out into categories of necessity or luxury expenses. 

Monthly or yearly expenses should be sorted as well. You will be surprised by the number of people paying for subscriptions they forgot to cancel. So, take a look at your bank statements and transaction details from the last few months at least. 

Cancel the memberships or subscriptions you do not want anymore. Ask for refunds if some payments were made without confirmation from your side. 

Cancel any credit cards you were roped into getting. Be firm in your position and cancel all unnecessary expenses weighing you down. Confirm everything and keep all the receipts.

4. Close Old Accounts

Handling multiple accounts can be very confusing and lead to stress. So, closing an inactive bank account would be a wise idea. Having multiple accounts may also lead to an overdrawn account if you forget about it. 

An inactive account may also fall prey to fraudulent activities. So close any old account you do not use regularly or one you might not need again. Another task would be to set all your regular bills to autopay so that you do not have to worry about overdue payments.

5. Lower your bills

Try lowering some of your bills if you are too stressed about money. It will help reduce the immediate burden. According to Emily Guy Birken, author of End Financial Stress Now (2017), “Internet and cable service is an easy place to start because they’re used to be negotiated with,” so try lowering your internet or cable bill first. 

Try negotiating for a lower deposit or monthly rent if you are lucky enough to find an understanding landlord. If you have pending medical bills or similar social undertakings, try contacting the respective billing departments. If you are absolutely unable to pay certain bills, contact social welfare agencies.

6. Adjust Tax Withholdings

According to Emily Guy Birken, adjusting tax Withholdings at work will be one of the fastest ways of adding more money to your budget. Change your tax withholding status to a lower refund (if you do not already) to increase your regular paycheck.

For this, you need to talk to your organization’s HR department. They will be able to guide you through this process with additional help from the IRS (Tax withholding Estimator) calculator. The IRS calculator would be able to specify the changes you will need to make. Depending on your employer, the changes will start reflecting from the next paycheck itself.

7. Handle Your Credit Card Service

Contact your credit card provider for details about your credit score. A good credit score will benefit you while applying for loans or while managing old payments. Pay off overdue bills and look into the previous transactions as well. If you are in a bind, call your credit card service to ask for a lower interest rate. If you are a dependable customer (why do you need a good credit score, you see), they might consider such a thing.

A low-interest rate will inevitably prevent more interest from accumulating. It will help you pay off the balances faster and might even increase investment when you are financially more secure. This is sure to reduce some of your stress about money.

8. Manage Loan Payments

Student loans and mortgages are crippling millions and preventing them from gaining financial stability. If you are under federal loan payment, you can ask for a lower loan payment plan. If it is a student loan or mortgage plan, you can consider the IDR or Income-Driven Repayment plan. The Debt-to-Income Ratio takes into consideration the IDR and helps you pay your loans accordingly. Although, mortgages and student loans may have different regulations.

This will make a huge difference in your finances, although the repayment time period gets extended. It will act as a breather if you are stressing too much about money. But if you plan your budget properly and pay your taxes on time, it will not be a burden.

If you are planning on repaying some other loans quickly, you can also try the Debt Avalanche Method. This method basically means using leftover money (after monthly expenses) to pay off loans at a high-interest rate. This will decrease the overall time period required to pay off the loans. But this is a risky method and should not be tried without expert advice.

All of these are advice aimed to decrease your stress about money. You can start practicing some of these methods from today itself. But at the end of the day, do seek professional advice and plan for a better future.

Author Bio: Charlotte Lin is a content creator at escaperoom.com. She’s a passionate young woman, mother to an amazing nine-year-old, and an avid reader. Over the years, writing has helped her explore and understand the world as well as her own self. She loves to travel, meet new people, and spend quality time with her daughter. You can find her on LinkedIn.

3 Bad Reasons to Claim Social Security at 65

If you're not acquainted with how Social Security functions, you may presume that there's a single age at which eligible receivers need to apply for benefits. Not so.

You actually get an eight-year window to insurance claim benefits that begin at age 62 and go on till age 70. (Technically, you're not required to apply for advantages at 70, but there's no financial incentive not to.) Smack in the middle of that window is 65, an age often related to retirement.

Here are a few wrong reasons to take benefits then.

Do you think it's your full retirement age?

Your full retirement age is the age at which you're qualified to take your full month-to-month Social Security benefits based upon your earning history.

That age used to be 65, as life expectancies have actually raised, older workers have been required to wait on accumulating their advantages in full.

Presently, the full retirement age for people born between 1943 and 1954 is 66.

Those born in 1960 or later have a full retirement age of 67, as well as for those born between 1955 and 1959, full retirement is 66 and a few more months. For that reason, to take benefits at 65 would mean reducing monthly benefits.

1. What kind of reduced benefits are we discussing?

It relies on your complete old age, yet you'll lose roughly 6.67% of your complete month-to-month benefit for each year you apply early. Therefore, if you're looking at the full old age of 67 yet claim benefits at 65, you'll lower your benefits by 13.34%. The ordinary existing monthly benefit is about $1,400, so if that's what you're eligible for at a complete old age of 67, yet you submit at 65 instead, you'll obtain a little over $1,200 as opposed to $1,400.

2. You assume you're needed to sign up for Medicare and also Social Security all at once

Many people have a tendency to connect Social Security with Medicare, thinking the two programs are interrelated, but they do have mutual regulations. 

One essential distinction is that Medicare eligibility begins at age 65. Also, you have to sign up for Medicare approximately 3 months before the month of your 65th birthday to get things started. 

But don't confuse Medicare eligibility with that of Social Security. Practical as it may appear to apply for both simultaneously, you'll reduce your Social Security benefits by going that route.

Though you're enabled to apply for Social Security as early as age 62, Medicare has a company eligibility age of 65 unless you qualify as a rare exception. 

Consequently, you must generally enroll in the two programs independently unless there's an engaging factor to claim Social Security at 65.

3. You think Social Security will run out of money if you wait

Many Americans file for Social Security before retirement age because they're worried the program is going broke and want to get their hands on their money while they still can. So, let's quell that rumor since it's somewhat unjustified. 

While it's true that the program is encountering some economic difficulties and may need to reduce advantages in the future if Congress does not fix it, there's no reason to think Social Security is disappearing. 

The program can maintain benefits at their present degree until 2034, which leaves lawmakers more years to resolve its future shortfall. Consequently, you should not hurry to file for benefits at 65 because you don't want to wait any longer.

Naturally, there are some scenarios where claiming Social Security at 65 isn't a negative suggestion. For instance, if you find yourself out of work, it's much better to take benefits than acquire credit card debt to pay your living expenditures. 

Yet if you're filing at 65 for any of the above reasons, you're doing yourself an injustice that can come back to bite you in retirement.

Are You a College Student? Here Are 5 Tips To Help You Manage Your Money

Going off to college means a whole new world for you, but you will end up without money and in deep debt if you are not careful. To help you with this, here are a couple of things you can do to manage your money while in college.

Budget

One of the main reasons most students end up using a lot of money is not budgeting. Before starting your semester, take the time to go through your needs and wants and allocate money for them. 

With a budget, you can easily stick to it and ensure you do not use up money meant for other things on superficial items. Your budget will change according to semesters, so keep that in mind.

Track Your Spending

Having a budget without a way to track your spending will not help. The good thing with this is, some apps can help you track your money, and you get to look back and see where most of your money goes. In doing so, you can ensure that you live within your budget.

Have a Loan Repayment Plan

If you plan to take a student loan, you need to consider a student loans settlement plan. The plan will ensure that you know how much you are getting as a student loan and what you will be expected to pay back. That way, you have time to figure out how you plan on paying back the loan.

Find Ways To Cut Costs

College life comes with many temptations to try and fit in, and if you are not careful, you will get caught up in that loop. The only way to avoid this is to live within your means. 

Just because you set a budget doesn’t mean you have to use all the money. You can cut down on some of your costs and either save or invest your money. That way, you have something for a rainy day.

Open a Savings Account

Learning to save from a young age when you are not earning much will help you develop a saving culture. The first step to saving has a saving account. 

It will help you stay on the right track and ensure you get into the habit of saving. Different banks will have different rules, so talk to a couple before settling on one that works for you.

Conclusively, managing your money while in college will ensure you get through your course without lack. It also prepares you for life after college when you finally get a job and start earning money. The tips above will guide you while in college, and even after so, put them in mind.

7 Prominent Ways To Save Money Wisely in 2022

Saving money is one of the crucial aspects of building wealth and having a secure financial future. As they say, it is never too early to start saving; saving money provides you with an opportunity to enjoy a quality life.

Saving money is all about how calculative you are, along with the kind of techniques you use to save. Unfortunately, there are a handful of people who have mastered this art consistently.

Through this article, we aim at educating readers who find it difficult to save money, straight forward ways to save and have a financially secure life in 2022:

1. Always plan your expenses monthly: One of the essential things you should start doing as a habit is making a monthly expense budget and sticking to it as much as you can. This method is foolproof, but people avoid it as it is tedious. As you save money by the end of the month, you may use it to invest smartly and watch your money grow with a specific time frame. You may work on your budget and alter it according to your needs, allocating some for emergencies, savings, leisure, etc.
2. Saving maximum money to the best ability: If your monthly expenses are high and you cannot save as much as you want to, it is time to have a robust money-saving plan. You can identify things that you can spend less money on things like dining out or entertainment. Use resources like community events or free memberships. Limit activities like eating out, shopping, and watching movies to once a month. When tempted do an impulsive purchase, hold on for a few days. You may be glad you passed the urge to buy or look forward to saving up for it.
3. Smart investing: Saving and investing a certain amount of money in a recurring deposit is one of the best ways to save money every month consistently. This activity will inevitably make its way into your monthly budget plan. The early you start investing, the more benefits you can reap out of compounding eventually. SIP is another option if you are willing to incur a negligible risk. You can browse the internet for multiple investment options depending on how much and how long you are ready to save.
4. Manage your debts wisely: If you want to be debt-free at the earliest in life, managing them wisely is very crucial. Irrespective of the nature of the loan, you can be debt-free if you incessantly set aside the EMI amount money and make it a part of your monthly budget.
5. Manage your spending impulses: If you can list down all the expenses you can avoid in a month like limited eating out or shopping, it will automatically make it easier for you not to overspend or buy things on an impulse. This will help you to the extent to which we succumb to temptation typically boils down to our willpower. If you see something you like, wait at least a week before buying it, it might happen that the urge to buy that will pass.
6. Plan and eat home-cooked food: Food budgeting and groceries are often a large part of the monthly expense, especially when you live with your family. Planning your meals for the week, making a list of the ingredients, and prepping them accordingly is a great way to avoid wasting food, which saves money. Additionally, you may prevent packaged food and make dressings, gravies, and sauces from scratch. They taste better and cost less.
7. Earn a passive income at home: A single or even two sources of income are often insufficient with the ever-increasing inflation. A great way to earn a passive income is to channel your passion and creativity to supplement your current income. Baking cakes, making jewelry, tiffin services, or even a small online business, etc., are great ways to start.

All these techniques are tried and tested. Let’s start work on building a financially secure life in 2022.

Author Bio:

Aatish Khanna works with the Content Marketing team at Money Club, a digital chit fund platform that makes saving, borrowing, and investing your money more efficient. He writes on topics to help his readers understand processes so they can make better financial decisions. He’s the go-to person that his family, friends, and colleagues turn to for all their money matters. He loves to play board games and aspires to one day build his one finance-related board game and app.

How to Correctly Manage Your Bank Account

Controlling your finances is essential if you want to be ready for all the unexpected events life may throw at you, but doing it effectively is not as easy as it sounds.

Too many people go shopping without looking at the bigger picture while others might keep a savings account that’s too big, to the point where they’re unable to enjoy their daily lives.

Living with an obsession or being too carefree is equally counterproductive, and that’s why finding balance is important when you finally decide to manage your bank account effectively. 

Choosing the best checking account and being smart with your financial decisions is a good start, but that’s not all you can do.

Taking It Slow

When dealing with your finances, rushing things will only give you bad results. Your cash flow needs to be managed patiently over the course of months, even years if it’s necessary. 

Do not wait for something to happen before you start being active with your bank account. Following general guidelines and keeping essential tips in your mind will allow you to do everything patiently, so you can make the most of your situation.

Using Automation

Automating your finances will allow you to save time and have your money ready for all occasions. If it’s possible, try setting up a direct deposit with your employer so your paycheck is ready to be used when it’s time to receive it.

You can also set up your account in a way that monthly bills will get paid directly from it, so you won’t have to keep track of every due date and you won’t have to do it manually every month.

If you’re trying to save money, setting up automatic transfers to your savings account can help you avoid the temptation to go shopping or do something that will make you spend your entire paycheck.

Be Smart About Lawsuits

Accidents happen, and sooner or later, you’re going to find yourself dealing with a lawsuit because of someone else’s negligence. Everyone is afraid of dealing with legal issues because they can be expensive and many months can go by before seeing a settlement.

But there’s no need to empty your entire savings account while trying to deal with it. Patience is always repaid when trying to win a case, and that’s why asking for a pre-settlement loan is a smart choice for you and your bank account.

You won’t have to pay anything back if you lose your case, so there’s no risk to worry about. Always remember to ask for all the necessary information when taking out one of these loans, as they are regulated differently from state to state, and asking for one in Las Vegas will be different when compared to another area. Keep that in mind when you’re looking for pre-settlement funding in Nevada.

Fees

Account fees are often overlooked, but they can make a world of difference. Many banks charge maintenance fees, and the last thing you want to do is pay for the privilege of letting banks hold your money.

Do not choose the first bank available, but look for an online one that offers an account with low or no fees. Remember to avoid banks that make you pay an ATM fee, you shouldn’t have to pay just because you need to withdraw cash.

Doing What Works for You

Creating a routine that works for you is essential when managing your finances. Look at your cash flow and consider what you could be doing differently. Look at your old habits and close accounts that are too expensive to maintain. Remember to find the right balance and your money will always be in a good place.

Top 4 Places To Retire When You Have A Lot Of Life Left In You

Now that you have finally retired after decades of working, some people might think you are ready for a rocking chair on the front porch. However, you know better. 

Since you are only as old as you feel, you realize you've still got plenty of life left in that body of yours. With so many places to go and people to see, it's important to pick a retirement destination that lets you do that and much more. 

To make your retirement one that is fantastic day after day, here are four great places to enjoy your retirement.

Sarasota, Florida

If you want white-sand beaches, a walkable downtown, and plenty of things to do near your home, Sarasota may be the place for you. A major tourism spot in Florida, the city is filled with museums, art galleries, and restaurants that serve every kind of food you can imagine. 

When combined with low property taxes, almost nonexistent crime, and a large retiree community where you can make plenty of friends, Sarasota is hard to beat.

Myrtle Beach, SC

While many places may not be able to compete with Sarasota, Myrtle Beach is an exception. Home to about 30,000 permanent residents, this South Carolina paradise has golf courses galore, lots of festivals, and much more. 

Best of all, when you are exploring Myrtle Beach Premier Properties, you'll find out property taxes are low, the state offers a homestead exemption for residents over age 65, and plenty of other financial benefits.

Manchester, New Hampshire

Should you want to retire to the northeastern part of the U.S., Manchester is a New Hampshire city you may want to consider. Surrounded by mountains and forests, the fall foliage is spectacular. 

If you love wintertime and perhaps want to do some skiing or other winter activities, Manchester gets about 60 inches of snow annually. When it's not snowing, plan on visiting local farmers’ markets and retail shops on Main Street.

Nashville, TN

Finally, you can spend your retirement hanging out at the Grand Ole Opry and other spots in Nashville. Long known for being the country music capital of the world, Nashville also features over 100 public parks, museums and restaurants, and pro football and hockey teams you can cheer on when attending their home games.

Since you have no plans to sit in that rocking chair and count cars as they go by your home, consider any of these great retirement destinations. Whichever one you choose, your days and nights will be filled with plenty of fun activities.

How to Make Sure You're on the Right Financial Path to Retirement

Planning for retirement doesn’t happen overnight. It takes careful planning and budgeting. The earlier you can get started the better position you’ll be on the right financial path to retirement. Here are some tips to help you get started!

Get Paid to Save With Your Employer

Many employers today offer a retirement savings plan like a 401k or a 403b where you may contribute a portion of your paycheck to go towards your retirement savings. 

This not only helps you start saving for the future, but employers may even match a percentage of your contribution. It’s literally free money for investing towards your future. Take advantage of this benefit if your employer offers it. It also uses pre-tax dollars.

Review Your Investments

In addition to a 401k plan with your employer, you can contribute to retirement through a traditional IRA and Roth IRA. There is a limit on how much may be contributed towards these plans each year depending on your income. 

Invest wisely by diversifying your portfolio. Don't put all your eggs in one basket. These investments also require periodic review. As you near retirement, consider investments with less risk. A financial advisor may help construct a financial plan to help you achieve your financial goals for retirement.

Budget for Your Retirement

How much you need to put away for retirement depends on the type of lifestyle you want to live. The factor is that on average Americans spend about 20 years in retirement, but the longer period of retirement you can plan for the more comfortable you'll be financial. 

If you want to maintain your existing lifestyle after retirement, you'll need about 70-90% of your pre-retirement income.

Reduce/Eliminate Debt

Entering retirement often means less income. The more debt-free you are, the less there is to worry about finding income to cover for that expense. Consider what you have and what you may want to offload. Do you have two cars, but only need one during retirement? 

Are you an empty nester and don't need a home with as many bedrooms? These are all considerations to help reduce and offload unnecessary expenses. The more you can clear out debt before retiring, the easier it’ll be for you financially.

Determine Your Retirement Age

Consider how long you will be working. Are you planning to take Social Security when you reach full retirement age? Taking it earlier can mean a reduction in your benefits, so the longer you can hold out until full retirement age the more benefits from Social Security.

It's never too early to start thinking and planning for your retirement! For some, a financial advisor may be necessary to help ensure the right financial path to retirement.

5 Top Financial Thought Leaders to Start Following in 2021

In today’s knowledge economy, intellectual capital is the most valuable resource. Becoming an entrepreneurial leader like Sanjiv Bajaj in the financial services domain not only requires experience and expertise, but also insights of industry leaders. 

Here is where sage learning and singular vision intermingle to produce innovation that finds currency in the market.

To tap into a stream of rich ideas, follow these 5 top financial thought leaders.

Anthony Clervi, Investor & Entrepreneur, Una

Anthony has a ton of experience in the investment, procurement, and supply chain industries. He draws from these wells to empower business leaders with actionable resources. 

He runs a thought leadership blog and is frequently invited to share his insights on podcasts. He is looked on by peers as the quintessential millennial leader and he believes that at heart, he is a “practitioner and an inspirer”.

Sucharita Mukherjee, CEO and Co-founder, Kaleidofin

Sucharita has been recognized as a Young Global Leader by the World Economic Forum. Using an inclusive approach to digital disruption in finance, she uplifts underbanked customers with tailor-made fintech solutions with Kaleidofin. 

She is among the highly esteemed inclusive fintech leaders in the world and works towards providing a better tomorrow for the excluded. Her experience at Morgan Stanley and Deutsche Bank in London enables her to pursue the goal of developing the informal finance sector. 

With financial inclusion in the crosshairs, she’s working on paving an easier way to access capital markets.

Wendy De La Rosa, Co-founder, Common Cents Lab

Head of research at Common Cents Lab, Wendy’s forte lies in using behavioral science to aid financial planning. Her website is chock full of case studies and resources, all designed to improve the financial health of those in the low- to moderate-income categories. A TED speaker, Wendy helped Google kick start its opening behavioral economics unit. 

Some of her works are published on Forbes, PBS Newshour, Scientific American, and TechCrunch. Through her work, she delivers better customer engagement and retention and improves product design, strategy, and revenue.

Varun Dua, CEO, ACKO General Insurance

Varun certainly knows the secrets of becoming an entrepreneurial leader – his insurtech start-up ACKO, succeeded in raising $30 million in seed funding even before it was launched! His interests lie in start-ups, online product management, financial services, insurance, and technology, and he is credited with launching India’s insurance journey into the digital era.

A key part of his strategy with ACKO is to be direct. Varun believes that the customer is best served through easy accessibility. Forging this direct relationship is crucial to his business model and long-term success. 

ACKOs methodology of meeting the customer, at the point of need, is by design, achieved through smart partnership choices. It is this kind of forward-thinking that lends itself to the modern and older generation customer.

René Lacerte, CEO and Founder, Bill.com

René is a well-known name in the global fintech market and his platform, Bill.com, is used by countless entities worldwide, including big banks like Wells Fargo and JPMorgan Chase. 

Hailing from a family that founded 15 companies in 100 odd years, René’s thought leadership is the overflow of 20 years of experience in software, finance, and payments.

The wisdom and actions of prodigious financial leaders in India and across the world shape the future. Cultivating this art of leaning into cutting-edge concepts and marrying it with modern-day innovation is a surefire way to become a successful Indian business entrepreneur.

At Your 50s? Follow These Strategies to Save for Retirement

It is possible to build your retirement savings by following some proven strategies, even if you’re 50 or older. If you are worried about your financial future, it’s never too late to put together a solid financial strategy that aligns with your goals.

According to a 2019 survey of 2000 participants performed by GOBankingRates.com, 64% of those Americans expected to retire with less than $10,000 in their retirement savings account.

Don’t worry if you’re a part of this group. It’s never too late to start saving, even if you’re approaching retirement. According to retired certified financial planner Dick Bellmer, a former president of the National Association of Personal Financial Advisors, people should regularly review their retirement plan a minimum of every three years.

Let’s assume you’re reaching 50 and have yet to put anything aside for retirement. So, what are your options?

Here’s how you can begin your retirement savings plan.

Set up automated savings and improve budgeting strategy

First, evaluate your budget and remove any overspending costs to free up cash. According to Nadine Marie Burns, a CFP in Ann Arbor, Michigan, food is one area where many people waste money.

By creating meal plans, you may save over $100 each month from wasted or unused food.

Come up with a realistic savings goal and how much you can save automatically. If that’s too much to take in at once, focus on tiny modifications to your retirement plans over time.

George Gagliardi, a certified financial planner in Lexington, Massachusetts, suggested that you plan to live a long life and adjust your retirement income projections accordingly.

You have no influence over how long you live, but according to the Social Security Administration, the average 50-year-old man may expect to live another 30 years to 80.

On the other hand, a 50-year-old woman can expect to live for 33 years, to 83.

Maintain your investments

Set up automatic investments if you have a non-retirement portfolio or if you’re self-employed, managing your retirement fund. You will enjoy the benefits of dollar-cost averaging.

Regular investments can help you acquire more shares when stock prices fall and get fewer stocks when they are high.

As a bonus, you won’t have to remember to write a check each month.

According to Sandra Adams, a CFP in Southfield, Michigan, you also need a mix of different investments. Having investments of at least 60% in stocks will help you attain your objective over time.

However, don’t take too much of a chance when the market falls. Hopping in and out of the investment market might create severe problems in your plan, and you can’t manage those obstacles if you’re already behind schedule.

Pay off your debts

Do you have credit card debt, medical debt, or any other unsecured debts?

Pay them off as early as possible to free up money for savings. If you have a mortgage, create a plan to pay it off before you retire. Malcolm Ethridge, a CFP in Rockville, Maryland, suggested that removing housing expenses such as mortgage payments can lower the amount of annual expenses.

As a result, it will also reduce the amount of annual income you actually need to save for retirement.

Natalie Pine, a CFP in College Station, Texas, recommends avoiding future debt such as car loan debt. Instead, she recommends putting your income into a new account for buying a new car.

This will help you pay for a car in cash and spend less overall. Avoid taking out high-interest loans such as payday loans

Save for emergencies

Also, keep an emergency fund separate from your retirement savings to handle unexpected needs.

You can build one by putting money into it from bonuses or job promotions.

Consider insurance, especially disability insurance. It will be challenging to recover from any financial crisis if you can’t work anymore at 50 and haven’t saved.

Make absolutely sure you have sufficient home, auto, and umbrella coverage. Make sure you’re covered by health insurance.

Maximize your contributions if possible

According to James Shagawat, a CFP in Paramus, New Jersey, if your company offers a retirement plan, make sure you invest enough to receive the full match. If you’re 50 or older, you can contribute up to $26,000 annually.

You should also ask for any other retirement savings plans offered by your organization.

If your employer matches your contribution with offering corporate stocks, you may face “concentration risk.”

According to the Employee Benefit Research Institute research, 401(k) participants who receive corporate stocks as their employer match might end up investing more than half of their entire account balances in those stocks.

If this happens, if your organization performs poorly, it may impact your returns.

Contributions to a Roth IRA with diversified investments might help offset this issue.

Since Roth contributions are deposited with after-tax dollars, your withdrawals can’t be taxed once you reach retirement age.

If you’re 50 or older, you can contribute up to $7,000 every year. In 2021, if you’re single, eligibility will be phased out between $125,000 and $140,000 of your MAGI [modified adjusted gross income], and if you are married and filing jointly with your spouse, it will be $198,000 to $208,000.

Justin Meinhart, a CFP in Winston-Salem, North Carolina, suggests making these investments early in the tax year rather than waiting until the April 15 tax-filing deadline.

Work as long as possible

According to Sean Pearson, a CFP in Conshohocken, Pennsylvania, those days are gone when people used to retire at 60 or 62.

Now, people are working beyond the age of 60 or 65. They prefer investing their time in something less stressful than a high-stress job, which involves 40-to-50-hour work per week.

Following this strategy, people can continue to contribute to traditional IRAs even when they reach the 70s, as per the SECURE (Setting Every Community Up for Retirement Enhancement) Act of 2019.

Work on side hustles or search for 'found money'

Do you still need more retirement income? Then look for a part-time job you’ll enjoy or sell items you don’t need at an auction.

According to CFP Benjamin Offit of Towson, Maryland, you might consider selling your property and downsizing or moving to a smaller area with lower housing rates.

Downsizing can result in significant savings that can be used for retirement.

Finally, Sarah Carlson, a CFP in Spokane, Washington, recommends checking your state’s lost asset site for any old accounts. If you’ve worked for other companies, you may have accounts that have been turned over to the state.

Look for these accounts and reconnect with them to collect the money you forgot to withdraw or have lost track of.

Open a Health Savings Account (HSA)

Before you retire, you need to consider how you will manage unforeseen medical bills. Large medical expenses can suddenly exhaust a lifetime’s worth of money.

According to a 2019 Fidelity Investments estimate, a couple in their mid-60s will need $285,000 in retirement to meet health care costs.

Apart from that, people reaching their 50s can’t ignore the exorbitant cost of long-term care in nursing homes. According to a Genworth research, the typical annual cost of a semi-private room in a nursing home in 2018 was $89,292.

Considering these facts, people must plan retirement after including future medical expenses.

Long-term health insurance is one option that covers extended medical care such as nursing and assisted living. If you meet the requirements, you should start a health savings account immediately.

Your taxable income will be reduced once you get this insurance. Your investments will grow tax-free. Once you reach the age of 65, you can withdraw funds without penalty or tax (it will be taxable if used for anything besides qualified medical expenses).

You should do some homework and choose the best features for you, such as low fees and low minimum balance requirements.

Boost your Social Security benefits

The earliest you can begin receiving Social Security benefits is at the age of 62. However, at age 50, it’s a good idea to start thinking about how you’ll collect benefits. You may estimate your benefits using this Social Security calculator.

According to experts, most people claim Social Security benefits too soon.

That’s so unwise. People can earn more from Social Security benefits if they postpone retirement.

According to Elijah Kovar, co-founder of Great Waters Financial in Minneapolis, taking Social Security at 70 instead of 62 increases your monthly payout by around 76%.

Waiting to receive Social Security is also a great idea to make more money if you’re married. The surviving spouse gets the bigger Social Security payout if one spouse outlives the other.

You’ll have a larger pot to draw in retirement if the primary breadwinner waits to claim benefits.

Your tax situation is another crucial factor to consider while taking Social Security benefits. It’s the best source of income we have outside of Roth IRAs, from a tax point of view.

Implementing techniques that reduce taxable income, such as donation, charity, etc., can help you maximize your Social Security income.

Use income from traditional pensions

If you get a defined-benefit pension plan through your current or past employer, you should receive an individual benefit statement once every three years.

Once a year, you can also ask for a copy of the statement from your plan’s administrator. The statement should indicate the advantages you’ve gained as well as when they’ll become fully available to you.

It’s also a good idea to understand how your retirement benefits are calculated. Many programs use formulas depending on your income and years of service.

So, you might be able to make more money by working longer.

Don't ignore taxes

Finally, keep in mind that not all the money you save for retirement is yours to enjoy.

When you take money out of a regular 401(k) or traditional IRA, the IRS taxes you at your ordinary income rate.

So, if you’re in the 22 percent tax bracket, each $1,000 you take will only bring you $780.

So you must plan ahead to keep as much of your retirement money as possible. Relocating to a tax-friendly state might be a wise option.

Author Bio: Lyle David Solomon is a licensed attorney in California. He has been affiliated with law firms in California, Nevada, and Arizona since 1991. As the principal attorney of Oak View Law Group, he gives advice and writes articles to help people solve their debt problems.