Preparing for Retirement
rebuild your worth, book a free consultation todayBook Now
By Bromwich+Smith Staff | 778 words | Reading Time: 3 minutes and 53 seconds | Date: 2022/07/26
You may be starting to think about retirement and if you are, you are most likely going to consider how you can support the lifestyle you have in mind. If so, we have compiled six strategies that should help your money last longer in your retirement.
1. Look at your financial forecast
Review your retirement savings including: pension plans, saving accounts, non-registered investment accounts and registered investments. Then speak to your advisor to have them forecast how much income you’ll generate for your retirement. This will give you an understanding of what to start doing now.
2. Opt into automatic contributions.
The first step any employee should take, if it’s available to them, is to set up automatic contributions for their employer-sponsored retirement plan. Even 2 or 3 percent of your monthly income contributed towards retirement can make a big impact. Regardless of how small the contribution, setting up an automatic withdrawal every month – usually when you first begin the job, but it can be done at any time – can get you on track.
Setting up automatic contributions also eliminates the most difficult part of saving and investing – getting used to your monthly paycheck after withdrawing money intended for other goals.
Making these contributions as early as possible will also ensure the money has longer to grow, which can yield larger returns to last you further into retirement.
3. Take advantage of employer matching programs.
Once you’ve set up your automatic contributions into an employer-sponsored plan, the next best step is to take advantage of your employer’s contribution matching. Many companies offer to match what you contribute up to a certain percentage.
For example, let’s say you contribute 4 percent of your monthly salary and your company provides up to a 4 percent match as well – this means your contribution will be automatically doubled. In effect, you can double your money with no risk.
But if you contribute 2 percent of your salary, and your company provides a match up to 4 per cent, you’ll get only 2 percent. On the other hand, if you contribute 8 percent of your salary (and your company matches up to 4 percent) your match will simply max out at 4 percent.
Each company has its own rules and limitations when it comes to plan matches. Some might require you to work at the company for a certain amount of time before they begin to match your contributions, sometimes a year or two. This is called a “vesting period.” It’s important to check with your employer to see what their specific plan regulations are.
4. Invest spare money.
Once you have set up automatic contributions to an employer-sponsored plan, it’s important to take advantage of other retirement plans. Seek the advice of a financial advisor and find out what other options are available.
5. Invest with income in mind
After you’ve locked in your retirement plan contributions, it’s a good idea to invest in income-producing investments.
One such investment is dividend stocks. These are stocks that can produce a return like any other stock, but can also pay out a monthly dividend back to investors. Dividend stocks are often large, blue-chip companies that might not provide as much return as riskier investments, but can provide safety and income – both critical for any retiree.
6. Create second income streams now
One of the best ways to safeguard against running out of money is to keep making more of it. Even after you retire, you can continue to pursue passions or utilize a lifetime of earned skills to generate extra income.
Be it through a side hustle or part-time job, setting up a secondary source of income now can allow for another stream of income to fall back on once you retire. Side hustles for retirees have become more common in recent years, as sites like Upwork and Fiverr have allowed those with expertise in almost anything to monetize their abilities.
Increased life expectancies means retirees need to plan for longer retirements. By making sure to contribute as early as possible to defined retirement plans and getting smart about investing your time and money in ways that will continue to generate income, you can make sure your money will last as long as you do.
However, if you are struggling with debt, we want you to know you are not alone. Bromwich+Smith has a number of debt relief strategies to help you regain control of your finances and get your life back on track. Reach out today for a free, confidential, no obligation consultation. Bromwich+Smith’s Debt Relief Specialists are available by phone at 1.855.884.9243, or request a call back at contact us page. We want to see you financially healthy and well.