Often in retirement planning, much of the focus is on asset accumulation. No doubt it’s important to save and grow your money so you’ll have a sizable nest egg when you retire. However, it’s also important to minimize expenses in retirement. The higher your spending is, the harder it may be to make your savings last throughout your retirement years.
If you’re like many Americans, your 401(k) plan may be your largest retirement asset. A 401(k) plan is a tax-advantaged tool designed to encourage long-term savings. As long as the funds stay in the account, the growth isn’t taxed. This allows your funds to compound more quickly and can help you accumulate a substantial balance in a shorter amount of time.
If you’re like most Americans, you’ve probably been dreaming about retirement for most of your adult life. You may even have a clear vision of what your retirement will be like. Perhaps you see yourself travelling the world or pursuing one of your favorite hobbies. Maybe you’ll spend time with family or simply relax and enjoy your freedom.
It’s always helpful to visualize your retirement and plan how you will spend your time. You can use those visualizations to guide your planning and even to make financial decisions.
Are you one of the 64 percent of Americans who don’t have a will? That’s according to a 2015 study from Rocket Lawyer. There are many reasons why people choose to not have a will, the most basic element in any estate plan. Some may feel they’re too busy or they may not want to think about their own death. You could be like the 27 percent of respondents who said there’s no urgent need for a will or the 15 percent who said they don’t need one at all.1
If you’re under the assumption that you don’t need estate planning, you may want to think again. Estate planning is important for anyone who wants to leave a legacy for their loved ones or to a favorite charity.
If you’re like many Americans, your 401(k) may be your single largest retirement asset, and it could be your most important one, too. After all, your retirement may last decades, so it’s vital to ensure your money does as well. What you decide to do with your 401(k) after you retire can be a major factor in how long those funds last.
Do you dream of early retirement? Or do you wish you had the ability to enjoy the greater freedom that comes with retirement in your younger years? When you achieve financial independence, that dream can become a reality.
Financial independence is different than traditional retirement. The typical idea of retirement follows a process of working until you reach retirement age and then exiting the working world.
Are you considering using a Roth IRA to save for retirement? Or are you thinking about converting a traditional IRA into a Roth? If so, you’re not alone. The Roth IRA is one of the most popular retirement savings vehicles, primarily because of its tax advantages and flexibility.
With a Roth IRA, you don’t get an upfront deduction for contributions as you do with a traditional IRA. However, you do get tax-deferred growth while the funds remain in the account and tax-free distributions assuming you are either disabled or 59 ½ or older.
Are you planning to move to a new locale after you retire? Perhaps you want to move south near the beach or the desert so you can enjoy warmer temperatures. Maybe you’d like to experience a different lifestyle in a bustling city or in a quiet countryside. Or you might even want to immerse yourself in another culture overseas.
Whatever your goal, retirement is the time to pursue the life you’ve imagined for yourself. You’ll have no work commitments, no scheduling obligations, and, hopefully, plenty of money to fund your desired lifestyle.
The simple answer to this question is “yes.” There are two main types: (1) municipal bonds and municipal bond mutual funds and (2) tax-free money market funds.