We’re all moving towards retirement – whether we like to think about it or not. And the truth is that if we are not making deliberate moves to create an awesome retirement for ourselves, we probably will not have one.
Here are three things you can do to prepare for retirement.
1. Save More than the Minimum
Saving is a key component to preparing for retirement. To help people with this, many companies have started placing money into people’s 401(k) plan. This is cool, but it can give a person the sense that their retirement is being taken care of for them, and that they don’t need to put a lot of effort into it. Don’t make this mistake!
Find out how much your company is putting into your 401(k) – just so you are aware of what is happening with your finances – and then make it a priority to go above and beyond by adding money to your retirement account(s) on your own. That way, when you get to retirement – yippee! – the minimal retirement experience that your employer helped to create for you will be bolstered by your own contributions.
2. Take Advantage of Employer Match (Programs)
Another way that many employers attempt to help their employees prepare for retirement is with employer match programs. With these programs, employers match the contributions of their employees retirement plan deposits, dollar-for-dollar, up to a set point.
This is fantastic because it is essentially free money, given to you as a reward for making good financial decisions, but it can be confusing because different employers have different programs that vary in terms of how much money they are willing to match. Because of this, it is a great idea to meet with someone in your human resources department to learn how your company’s program works. Once you know how it works, take advantage of it.
3. Retire When You Will Get the Most Bang for Your Buck
Just like with company match programs for retirement plans differing from one company to another, the fees that companies charge when an employee retires early varies. Because of this, when you begin to approach retirement, it is a good idea to find out how the finances of retirement are affected by retiring at different ages.
If you are at an age where you could retire, but would make more money if you continued to work a few more years and are well and can continue to work, it is a great idea to do so, because the fees for retiring early can be substantial.
So hold on and make sure that you do not short change yourself after working so hard for so long.
Retirement is on its way– get excited! But also get financially responsible so that your retirement experience will reflect how well you save more than the minimum, took advantage of your employers’ match program, and strategically chose when to retire.