Retirement shouldn’t be an afterthought. These days, young professionals are being encouraged to start thinking about the later decades of their lives. After spending many decades as part of the workforce, individuals must continue to lead a financially stable life even after their regular employment. Here are some crucial factors that must not be overlooked in planning for retirement:
Aside from a person’s retirement fund, it’s also important to start diversifying assets that will grow through the years. A common mistake made by many is that they only think about investments later in their life. Investing one’s money doesn’t need to start expensive. With the right financial planning, an individual can start building a portfolio without using funds from major income streams.
Taking out funds from a retirement plan
Tough times or a change of jobs can lead a person to cash out of a retirement plan. While choosing to cash out seems to be an attractive option sometimes, a better alternative would be to transfer the existing account to another retirement account. This will allow the allotted retirement funds to grow while remaining untouched. Instead of taking funds out of retirement, it would be better for an individual also to set aside finances for an emergency fund.
Regular 401(k) accounts are not tax-free. This means that a retiree will get taxed every time they take out funds in the future. Instead of just relying on the traditional retirement plan, investing in tax-free retirement streams will allow an individual to have more income in the future.
Employees should be wise about where they will invest for their retirement years. Seeking the help of reliable financial planners will make the decision making easier and hassle-free.
Andrew Corbman and the team at ASC Financial help individuals identify potential shortfalls of their Social Security funds and maximize their revenue streams post-retirement. Visit this page for more information.