Although approximately 48 million Americans are receiving Social Security retirement benefits, many are still actively employed and hope to one day receive these benefits. If you are one of these soon-to-be retirees, you should know that there are things you can do to ensure a comfortable retirement financially.
Below, we will go over seven of these steps. This is crucial information because retirement can last 30 years or more, and a happy retirement is contingent on adequate pre-retirement planning.
Consider the benefits of tax-advantaged retirement accounts, such as HSAs.
Making the most of retirement savings vehicles like IRAs and 401(k)s is competent. A person age 50 or older can put an extra $1,000 into their IRA in 2022, bringing the total possible contribution to $6,000. Six thousand five hundred dollars in 2023, plus an additional thousand dollars for seniors. For 2022, the maximum 401(k) contribution is $20,500, with an additional $6,500 allowed for those 50 and older. For 2023, it will increase to $30,000, comprised of the new base amount of $22,500 plus the additional $7,500 for those aged 50 and up.
Consider HSAs (Health Savings Accounts) as well. With a high-deductible health insurance plan, you’ll be able to use tax-free funds for certain medical costs. Any funds still in the HSA after you turn 65 can be used for any purpose (subject to taxes), so it can also serve as a retirement savings account.
In the meantime, get ready to submit your Medicare application.
Signing up for Medicare is possible within the three months before or following the month you turn 65. You could pay a hefty fine if you’re late: There is a potential 10% annual increase to your Medicare Part B premiums for each year you were Medicare-eligible but did not enroll. Part B covers medical services but not hospital services. (Many people already collecting Social Security benefits at age 65 will be automatically registered, but don’t count on it.)
If you think you might benefit from the assistance of a guide, you should seek it out.
And finally, if you need assistance setting up a retirement fund, don’t be shy about seeking the advice of a qualified financial professional. It’s essential, and you should seek expert advice if you have any doubts. Even if you have to spend several hundred dollars, you could save a lot more. We favor fee-only advisors because they don’t make money from commissions on their suggested investments.
Following even a few of these suggestions can significantly impact your financial future. This knowledge can be the difference between a retirement filled with trips and treats and one full of stress and worries.
Most retirees need to account for the $18,984 Social Security bonus.
You’re probably several years behind your retirement savings if you’re like the average American. Nonetheless, a few “Social Security secrets” that the general public is unaware of could significantly increase your retirement savings. A simple strategy, for instance, could result in an additional $18,984 in annual income. After you’ve figured out how to get the most out of Social Security, you’ll be able to retire with the same sense of security we all hope to achieve.
Make a strategy
Put some thought into your retirement strategy now. Determine how much money you’ll need in retirement and how you’ll get it as a first step. It would be best if you plan to supplement your Social Security benefits with income from other sources, such as dividends, interest, and an annuity. Plan how much your savings you will spend each year, known as your “withdrawal strategy.” If you want to avoid going broke in retirement, creating a realistic budget is a good idea.