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Somehow December always seems to take us by surprise. Where has the year gone? Did I accomplish anything of importance? Have I learned anything new?
If you’ve followed our series One Year to a Better Retirement, you have learned a lot about saving for retirement. At a time when too many people have saved too little for their future, our goal was to show you it doesn’t take a lot of time or money to get started building a comfortable retirement.
It All Starts With a Plan
When we kicked off this series in January, we discovered that people who have a plan for their money save 245% more for retirement. We then told you about a simple three-phase plan that begins by consistently investing 15% of your income specifically for retirement.
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The next phase of the plan comes as retirement approaches. With the help of a financial advisor, you can project how much you’ll have saved and if that amount will provide the income you need. If it won’t, you may have to ramp up your savings or work longer in the final phase so you can have a more secure retirement.
How Much Is Enough?
We also tried to drive home the importance of saving enough for retirement. Holding back a few hundred dollars from your investing budget now could cost you hundreds of thousands of dollars in retirement. Always invest the full 15% of your income.
To accomplish that, you should open a Roth IRA in addition to investing in your employer retirement plan. A Roth IRA grows tax-free, and when you retire, you can use that money tax-free too!
Don’t Do This!
No series on how to save for retirement would be complete without some lessons on what not to do. Fixed annuities fall into that category because their expenses, surrender charges and low returns can’t beat mutual funds when it comes to building retirement savings.
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We also warned against using money from your Roth IRA to buy a home. It’s always better to save up your down payment separately and buy a home you can truly afford.
And Don’t Forget These!
You also learned that even if you’re behind on your plan, you can still have a comfortable retirement . . . as long as you get started right away. We even talked about how long-term care insurance can protect your savings if you have to stay in a nursing home, and you learned how to perform your own retirement plan maintenance.
Put All That Knowledge to Work!
That’s a pretty busy year! But don’t stop just because the year is done. If you haven’t already, take what you’ve learned and put it to work building a secure retirement. Now that you know it just takes consistency and good choices, there’s nothing stopping you!
Want Help Building Your Own Better Retirement?
An experienced financial advisor is a big part of a successful retirement investing plan. You can work with an advisor who’s earned Dave’s recommendation through his nationwide investing Endorsed Local Provider (ELP) network. Your ELP will have the heart of a teacher and the knowledge you need to build and follow through on your plan. Find your ELP today!