3 Keys to Successful Retirement Planning

Retirement planning Before retiring from your 9-to-5 job and your hectic lifestyle, you probably can’t imagine accomplishing less than you intended in any given day and not feel frustrated about it. Paradoxically, after retirement, you probably won’t accomplish as much as you do right now, but you’ll be happy about whatever you do manage to get done. During retirement, you’ll change in a way that you would previously would not have thought possible. All sorts of lifestyle changes are possible.

So, how do you get to this place where you start seeing things in perspective, stop sweating the small stuff and notice that it’s all small stuff? You need to be able to create a comfortable retirement.

Three ways to make sure that you take care of things before you retire is to get life insurance, contribute enough to your 401(k), pay off all your debts.

Buy Life Insurance 

When you get life insurance, you’re taking care of your family when you are no longer here. After you die, your beneficiary will file a death claim with your insurance company and submit a certified copy of your death certificates. In most states, an insurance company has about a month to review the claim before they pay it.

If you would like to learn more about the benefits that life insurance can provide your loved ones, then check out PolicyZip.com, a website that reviews up top-rated life insurance companies that explains exactly how life insurance works.

Make Full Use of Your 401(K)

If your employer gives you a traditional for 401(k) plan, you can contribute pre-tax money.

If you’re in the 15% tax bracket, it will be a huge advantage because the money comes out of your paycheck before taxes.

If, for example, you earn $1,000 every two weeks, $150 will be deducted as your contribution and your take home pay will drop to $850.

Another option, if your employer offers a Roth 401(k), is to make your contributions after taxes.

Either way, whether you get a traditional IRA or a Roth IRA, you should try and match up to your employer’s contribution. If, for instance, your employer offers you a 50 percent match up to 5 percent of your salary and you earn $100,000 a year, then contribute up to $5,000 a year. If you do, your employer will add another $2,500. Essentially, you’ll get a free amount of money.

Become Debt Free

If you have a large number of debts before retirement, you will still have to pay them after you retire. So, if you can become debt free before you stop working, then you will not have to tap into your savings during retirement to pay off debts that you had previously incurred.

It’s easiest if you start by clearing up consumer debt, like the purchases you’ve made on your credit card and your car loan.

One way to get the money you need to pay off these debts is to cut your subscriptions and any other recurring costs. In short, repurpose your money to clear your debts.

Once you’ve cleared your consumer debts, then work on bigger debts, like your home mortgage. You can pay off your mortgage quickly by increasing your monthly payments. This will speed things up.

By having no debts when you retire, it will ease your monthly cash flow. You’ll also have less financial issues to worry about and can focus on buying the things that you need when you need them.

In summary, three ways to improve your retirement plans are to get life insurance, contribute to your 401k, and become debt-free before you retire.

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