How to Take Charge of Your Retirement

You may occasionally think about saving for retirement, but with so many expenses to handle each month, it can be difficult to figure out how to squirrel away some money for your retirement.

Besides struggling to make ends meet, you may not even have the time to think about how to go about taking charge of your retirement.

With that in mind, here are some ideas to help you get started on handling your retirement plans:

  1. Arrange for burial insurance

By arranging for burial insurance, you will help your family with final expense costs when you transition. This is an alternative form of end of life insurance which will assist your family manage the high costs of your funeral and memorial. This is available at a fraction of the price it would cost for making pre-paid funeral arrangements.

  1. Take advantage of your company’s matching contribution for retirement savings

If you are not sure about how your company can help you save for retirement, speak to the HR department. Your company may have a 401 (k) plan where your employer will match your contribution to the plan by a specific percent of your salary. You must, however, invest enough of your own money to receive the company match. Unfortunately, many people don’t get around to taking advantage of this program because they don’t budget or think ahead to their retirement years. Find out how this program works and begin using it.

  1. Create a rainy-day fund

By creating a rainy-day fund, you will not be tempted to borrow money from your 401(k) when you have a financial emergency.

Although you may intend to put the money back in the future after you have taken care of your financial emergency, this is an expensive decision to make for two reasons:

First, when you take out a loan, you lose the momentum of your investment growth. As a result, you will reduce the amount of your retirement savings. How much it shrinks will depend on the loan size, the repayment arrangement, the amount your account was earning, and the interest on the loan.

Second, since your attention has shifted to paying the loan back, you will probably quit contributing to the matching contributions plan. As a result, you will not receive any matching contribution funds from your employer.

  1. Use the 4% rule

Assuming that you have started saving for your retirement, do you know how much savings will be enough? One way to figure it out is to calculate your yearly retirement withdrawals, and to do that use the 4% rule. What is the 4% rule? A CNN article  provides a good definition: “The 4% rule states that if you begin by withdrawing 4% of your savings during your first year of retirement, and adjust subsequent withdrawals to account for inflation, there’s a good chance your savings will last for 30 years.”

  1. Work with a retirement planner

If you’re not familiar enough with managing finances, then the idea of a DIY retirement plan may be a little intimidating. In this case, why not get some sound advice from people who have specialized in retirement planning. A certified retirement financial advisor will help you understand how to increase your deferral to save more, how to calculate your retirement so that you can decide how much longer to work, how to allocate your assets so that you improve your outcomes.

In summary, you can take charge of your retirement by getting some form of burial insurance, by taking advantage of your employer’s contribution matching plan, by not borrowing from your 401(k), and by getting the help of a professional retirement financial advisor.


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