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How to Go About Preparing for Retirement A long time ago, retirement was something to look forward to. You look forward to relaxing and enjoying yourself after working hard for decades. Today, there is no longer that same excitement, since life expectancy and the cost of living continue to rise, one gets anxious of a having a future of financial woes. When it comes to savings, it is said that a third of the people approaching retirement have none to speak of. In order to be free of trouble on your retirement, here are some tips that you can follow. You can see from government data that social security is the primary source of income for a third of Americans. While this is helpful, it will not cover the costs of unexpected events. That is why it is important that all retired individuals have some savings to cover inevitable shortfalls. Save a certain portion of your income regularly and do it over many years. If you set aside money regularly , you will be surprise how much you can accumulate over the years. Together with savings, it also help to reduce spending and cutting back on things that are not really necessary. Think of ways that you can lower your monthly bills like getting a cheaper car or a cheaper health and life insurance. Make sure you don’t overspend on phone, internet, and cable fees. You can always find good deals when you shop online for food, clothes, or whatever needs you may have.
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Participate in a 401k if your employer offers it. Compared to bank accounts, these plans offer greater savings potential. Your employer also has the option of matching your contributions. Not every boss may be generous, but there are those that are.
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Open an IRA. A traditional IRA lets them make tax-deductible contributions which are true for most workers. Also, investment earning can also grow tax-deferred until withdrawals are made much later on. You can also avail of Roth IRAs which are funded with after-tax contributions; this allows for tax-free earnings and withdrawals. If you want to find out what IRA is best for you, you should speak to a retirement planning professional because these accounts can be rather complex. If you want to receive higher social security payments in the future, the best thing to do is to delay receiving it. Even if you only delay for a year or two after the earliest age you can start receiving benefits, or sixty two years old, you will get an increase in your monthly check. Some even defer payment up to age seventy so they will receive more income in the coming years. When you reach sixty seven or above, you can draw your full retirement. These steps can assure you of being prepared for your golden years.