Retirement planning is an easy thing to put on the back burner – until retirement starts to get closer and you realize you haven’t made the proper preparations to put you and your family in a good position. To make sure you are ready for retirement and are able to sustain yourself financially for the rest of your life, you should get started as soon as you can.
The good news is that retirement planning doesn’t have to be as complicated or scary some might believe. By coming up with an investment plan early on, and then sticking to that plan you should be able to make some decent headway towards reaching your specific goals. You will most likely have to sacrifice in the short term to be able to put away money as part of your plan, but that commitment will be well worth it in the long run.
Keep Your Retirement Planning Streamlined
One of the biggest problems I saw in my job as a stock broker was that many individuals had retirement accounts all over the place. They would have accounts spread across a number of different online brokerages, not to mention several old 401k plans sitting with their employers. There is wisdom in having several brokerage accounts, for various reasons, but being too spread out will only make things more difficult especially if you lack the time to manage them all.
That is also not to mention the fact that being so spread out can make it difficult to know exactly how diversified you are and if you’re overlapping in any areas. When it comes to retirement planning you want to make it as simple as possible, not more difficult. In the event that you do have multiple accounts then you’ll want to make sure you’re on top of them so they don’t go off track. Personally speaking, I use Personal Capital which is a free tool which allows to congregate all your accounts into one location – simply to watch how the entire portfolio is performing and see if there are any expenses you can mitigate.
Another option to consider if you want to streamline your investing is to consider using a robo-advisor, like Wealthfront. With Wealthfront, or most other robo-advisors for that matter, you get the benefit of a financial advisor without the nasty fees. This allows you to focus on growing your assets and allowing someone else to manage the ins and outs of the investing for you.
Take Advantage of Your 401(k)
If your employer offers a 401k along with a 401(k) match, you should take advantage of it as much as possible. I love the 401k match as it’s free money, which there is none better especially when it comes to saving for retirement. Take the time to learn about the program and generally choose the funds that are lower in fees as those will likely be broad based index funds.
If you’e not certain where to invest your 401(k) monies ask your Group Benefits area what educational offerings the 401k provider offers. Many providers will offer free courses or materials that will not only help you determine what kind of portfolio you may want to think of pursuing, but also make your retirement planning smoother overall. Don’t feel shy about taking advantage of those offerings as they’re there for you and your retirement planning is worth making sure you’re comfortable with what you’re doing.
Stay Out of Debt
A great way to make retirement planning easier is to reduce your debt as much as possible. By killing your debt now you will have more money to put away for retirement as well as have little to none when you enter retirement. Things like mortgages and auto loans are great to try and eliminate while you are still working so you don’t have to worry about those payments once you enter your retirement years.
The most important piece of retirement planning advice you can receive is simply to start as soon as possible. There is no time like the present to think about your future and how you are going to pay for it. Even if it seems like a long way off, retirement might be here sooner than you think and you need to have the money in the bank to handle your expenses and be able to live the lifestyle you hope for after your working years are behind you.
What are you currently doing to make your retirement planning easier to manage? When did you start actively saving for retirement?
Photo courtesy of: Lending Memo