If you’re expecting to retire in the next six months or so, there are some things you might want to think about first.
Create a budget for retirement
Some expenses will increase and others will likely decrease as you move into your retirement years. Have you put together a good budget to incorporate those changes when you retire?
Have you tested your retirement budget to see if it fits you? Why not try it out for a couple of months now, before you retire, so you can see if you need to adjust the budget (or your expectations) ahead of time?
Don’t pile on more debt over the holidays this year
Sure, you love your friends and family, but you haven’t yet actually lived on your retirement income. Maybe wait a year and see if you have all your finances at a good workable level, then splurge next year if you’re comfortable doing so.
Entering your retirement years with a large amount of extra debt from holiday shopping hanging over your head probably isn’t the best way to launch your retirement.
Give your retirement savings one more big boost
If your employer offers matching contributions to a 401(k) and you haven’t maxed out the amount they’ll match for the year – why not do it now? It’s your last chance to get the extra “free money” your company is offering you for saving.
The maximum annual contribution for a 401(k) is $18,500 in 2018. And you can add an extra $6,000 for the year to that amount if you’re 50 or older. If you haven’t maxed out your annual contributions for the year, why not do so before you retire? You won’t regret having a larger nest egg.
The Internal Revenue Service has announced they’re allowing an extra $500 in 401(k) contributions in 2019. If you keep working into January, you could add $19,000 + $6,000 if you’re 50 or older, for a total of an extra $25,000 into your 401(k) in 2019. And the IRA contribution limit is also increasing in 2019.
Check with a tax professional
Have you estimated how much you’re going to be paying in taxes after you retire? Of course, just as in your working years, it will depend on how much total income you have each year. It will also be affected by which types of accounts are included in your retirement portfolio (traditional vs Roth, assets with capital gains, etc.).
Would it help you keep more of your income if you made a charitable contribution this year? What about next year? Is there a better way to structure all the resources you’ll be using during your retirement to minimize your tax burden while still paying your fair share? A tax professional should be able to assist you with that.
Review your current savings portfolio
It’s a good idea for everyone to do this annually. Situations change, for better or worse, throughout life – so spend a little time making sure your 401(k) allocations or IRA investments reflect your current position.
Generally, we move from more risky investments toward more conservative investments over the span of our working careers – but how much of your portfolio consists of each? Does it accurately reflect where you are in your life or are you overdue to adjust it?
If you haven’t been doing this maintenance all along, your savings might have been a bit too exposed to the market fluctuations in 2018. If that’s the case, you may even need to postpone your retirement a while to let your portfolio recover. That’s definitely a decision where it can help to talk things over with a professional financial planner.
Check your beneficiaries
Maybe you got married. Or divorced. Or added children to your home. There are many life events which may lead us to update the beneficiaries listed on our various savings accounts, insurance policies, etc.
Are your beneficiaries up-to-date for your retirement accounts? Do they reflect your current desires and priorities?
At Texas Financial and Retirement, James Holloway Sr. and the rest of the team are ready to help you with planning your retirement – whether you are within 6 months of starting or a decade or further away. Contact our financial planners at firstname.lastname@example.org 903-534-5477 to apply for a free initial consultation. We’ll help you review your current readiness for retirement, discuss your personal retirement dreams, then help you to create a customized retirement plan appropriate for you.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Texas Financial and Retirement, Inc. are not affiliated companies. Investing involves risk, including the potential loss of principal.Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions.646943