This is part two of the two part series talking about how to plan now, and save yourself the stress and the headache later.
- Have you thought about making investments? Even though the most common way to save money is opening a savings account, investments yield a higher return on your money. Look at all the different ways you are currently saving – i.e. through savings accounts, retirement plans, pensions, etc. – and see if there are ways you can earn more on this money. Speak with your attorney about ways you can diversify in order to see a higher return.
- Do not, under any circumstance, cash in your retirement. This is tempting, particularly for those going through financial crisis. Incorporate other options into your financial planning; otherwise you are going to regret this decision in the future. This is also true for individuals losing a job or changing jobs. Learn what to do with your 401(k) or your pension, as well as how you can roll them over into other investment opportunities.
- Are you familiar with IRA accounts? An IRA is an Individual Retirement Account. These accounts allow up to $5,000 worth of annual deposits, but you are able to open the account with less. For individuals ages 50 and older, the option for higher annual deposits is present. There are also tax advantages to having IRA accounts. Discuss all of this information with your bank or financial institution, as well as with your estate planning attorney. Be aware that there is more than one type of IRA account – a traditional IRA and a Roth IRA. Hold regular discussions to determine which is best for your financial future.
- Plan ahead for Social Security: each year, the Social Security Administration sends out annual statement outlining what your benefits are going to be and when you become eligible to receive them. If for some reason you are not receiving these statements, call your local Social Security office and request this documentation. It should be included in with your financial planning, as well as your estate planning documents.
Remember, throughout the entire retirement planning process, there is no such thing as asking too many questions. If you are unsure about an investment, or don’t feel comfortable with them for any reason, set up a meeting with your financial institution or your estate planning attorney to discuss these concerns. This is your financial future, and it is important you feel comfortable with all the decisions made and all the plans put into place.