Planning for Your Future: Essential Retirement Planning Tips

While retirement planning may feel like a distant concern, especially for those just starting their careers, the long-term benefits of early planning are evident. A compound interest allows your money to grow exponentially over time, and the earlier you start saving, the more time your money has to accumulate. With strategic planning, even small contributions made consistently over a long period can grow into a significant retirement nest egg.

If you’re unsure of where to begin, keep reading. We’ll explore practical strategies to help you kickstart your retirement planning journey and make the most of your savings.

Building Your Emergency Fund

While an emergency fund may not seem directly related to retirement planning, it does play a critical role in ensuring you stay on track with your long-term financial goals. Without it, you may have to tap into your retirement accounts when faced with unexpected expenses.

Your risk management funds can be customized based on your job stability, family size, and debts. However, we recommend having three to six months’ living expenses in a high-yield savings account. This account should be easily accessible yet separate from your other savings accounts to avoid the temptation of using it for non-emergency expenses.

Make Retirement Savings a Priority

It’s important to remember that even small contributions add up over time regarding retirement planning. Start by contributing at least 10% of your income to a 401k, Individual Retirement Account (IRA), or Thrift Savings Plan (TSP) if financially possible.

• 401(k): This employer-sponsored retirement savings plan allows employees to save and invest a portion of their paycheck before taxes are paid. Many employers even offer matching contributions.
  
• IRA: An IRA account allows you to save and invest money on a tax-advantaged basis. With a traditional IRA, contributions may be tax-deductible. And the best part is that that tax-deferred account grows until you withdraw it in retirement.
  
• TSP: Similar to a 401(k), a TSP is for federal employees and military service members. Employees contribute a portion of their salary to the TSP, and the government provides a matching contribution.

Start by contributing 10% of your salary to one of these retirement planning accounts. As your income increases, increase your contributions.

Protect Your Life, Loved Ones & Possessions

Risk management is another critical retirement planning strategy. If you have family members who rely on your income, consider taking out a life insurance policy. This ensures dependents will be cared for if you unexpectedly pass away.

Having adequate health insurance is also essential. While it may be tempting to forego health insurance altogether or choose a plan with lower premiums to save money, this could cost you more in the long run if you experience a severe medical issue.

The same applies to protecting your assets. If you carry a mortgage, lenders will require you to have home insurance. The law also requires you to insure your vehicles. However, it is essential to understand that the minimum required coverage may not sufficiently protect your investments. And if an unexpected disaster or accident occurs, you may have to tap into your retirement savings to cover it.

Build a Financial Plan

Many people fail to plan for retirement because they don’t know where to start. This is why Shared Vision Wealth Group exists.

We will help you connect the dots and build a customized savings plan to meet long-term goals without compromising your current lifestyle.

Our goal? To build long-term relationships with our clients, helping them:

• Organize and review their current financial situation
• Assess cash flow
• Plan for inflation, rising tax rates, and healthcare expenses

We do the heavy lifting on your behalf, using proven strategies that mitigate risk and ensure long-term rewards.

Take the First Step Toward Your Unique Financial Future

You’re not alone if you’re uncertain about beginning your retirement planning. Over the years, we’ve helped countless people just like you. Our experienced wealth management experts will guide you through the process and help you create a financial plan designed to professionally manage your assets, maximize your savings, and support an enjoyable retirement. Contact us today!