It doesn’t matter what age you are, planning for retirement is always a good idea. Now is always a good time to think about the future. Whether you are in your early 20’s or late 50’s, retirement planning should be taken seriously. There are many temptations to avoid retirement planning. For example, other expenses and luxuries may take precedent over it. It is important to do away with these temptations or control them at the very least in order to live a stress-free life once you hit retirement age. Below are some tips that can help you:

Save as Much as You Possibly Can

Although it is never too late to start, saving early has distinct advantages. You can watch your money grow because gains are building up from the previous years. Compounding interest is a powerful thing. It is a great way to accumulate wealth for retirement.

Set Measurable and Realistic Goals

Be honest about your retirement goal. If you want to live in luxury, calculate how it will cost so you know how much you should save to achieve that dream. Though there are “rules of thumb” that helps in retirement planning, nothing beats having security with what you have saved.

Consider 401(k) Plan

Making contributions to a 401(k) Plan is an easy way to save money. In addition, the cash you put in here will be immediately tax deductable. The growth on your savings is tax-deferred so you can boost your retirement savings.

Consider IRAs

Similar to the 401(k) Plan, the IRA also features tax breaks. There are two distinct types of IRAs including traditional IRA and the Roth IRA. The traditional plan features tax-deferred growth that allows you to pay taxes only after withdrawals. Meanwhile, the Roth IRA features tax-free growth meaning you don’t pay tax upon making withdrawals because it has been paid for previously.

Look Into Diversifying Your Portfolio

If you’re still at the early stages of your career, consider diversifying your asset portfolio. Invest in stocks, bonds, mutual funds while keeping a certain amount of liquidity. Diversification allows you to leverage on long-term growth rather than short-term gains.

Work Part-Time After Retirement

Depending on your personal preference and capability, working part-time during retirement can have some benefits. It engages you both mentally and socially so you remain active. At the same time, it is also financially healthier for you because the amount you need for your nest egg is lessened.

Are your ready for retirement? Have you been investing your monies over the years, saving 401ks, and actively planning for retirement? If so, you’re in the distinct minority. Well over 90% of retirees are totally unprepared when the time comes. As a result, they end up living their retirement years in far different circumstances and environments than they had envisioned.No one is going to take responsibility for your retirement except you. The people that end up satisfied in retirement are the ones that figured that out early on If you don’t plan for it, you could easily find yourself destitute when you reach your sixties.One way to begin planning for retirement is to use retirement planning software. These types of software can make retirement planning a snap. But what do you look for in a retirement planning software tool? First, the software should be user friendly. Experts will tell you that if a piece of software is hard to use, it won’t get used. Secondly, you should look for software that is well supported and, preferably, with a history. You don’t want to be in a situation where you’ve spent hours and weeks entering all of your financial data into a program only to find out that the company has gone out of business and no longer supports the software. Sometimes, it’s worth paying a little bit more for a piece of software in return for having the support of a substantial company behind it.A third necessary feature in retirement planning software is for the tool to be capable of tracking stocks, bonds, 401ks, IRAs, and other common financial investment instruments. The tools should be capable of extrapolating how much a regular series of payments over a specified time frame at a specified interest rate will result in at the time that the person retires. And it should be able to work backwards as well. For example, assume that you are 35 years old. The tool should be capable of taking your desired income requirements at 65 years, and determine how much you will have to save each year in order to reach that goal.It’s not mandatory that you actually use software to plan your future. Plenty of people, especially if they have the money, are more than comfortable with leaving their retirement planning services in the hands of a professional. Even in these cases, however, it doesn’t hurt to use retirement planning software to get an idea of the possibilities available to you. You can then take these broad suggestions to your financial planner for implementation of the finer details or simply for a more informed feedback of the desirability of your plans. But also, keep in mind that financial planners aren’t gods. And they are dealing with multiple clients. It’s very possible that your tool may discover something that they missed in putting together you financial portfolio.For many of the baby boomers beginning to reach retirement age, it’s too late to put a long term retirement plan in motion. But even they, can make use of software to ensure that the monies they do have last as long as possible. As, for the younger workers, the best time to start thinking about a retirement plan is when you’re young. The younger you start, the less painful are the financial sacrifices that you have to make.

Clint Eastwood playing “Dirty Harry” warns, “A man’s got to know his limitations.” This advice is particularly appropriate for financial planners and advisors who are giving advice beyond their expertise. Though I am biased because I have over 27 years of technical expertise in the IRA and retirement plan area, the lack of knowledge in this area can cost clients hundreds of thousands or even millions of dollars.
I have seen financial planners without an adequate background in IRAs and retirement plans, acting without advice from counsel or even advice from other experts in the financial planning area, make enormously costly mistakes. That is costly to the clients, not the advisor. IRA & Retirement Planning Mistakes That Can Accelerate Acceleration of Income Taxes and Can Cost You Up to a Million Dollars or More!
For example one advisor had both a father and son as clients. The father died leaving his IRA to his son. The advisor promptly transferred the IRA from the father’s name to the son’s name? Sounds o.k. to you? But it isn’t o.k. If you transfer an inherited IRA to a non-spouse beneficiary without a special designation like “inherited IRA of Dad for the benefit of Son” you cause immediate income tax acceleration for the IRA beneficiary. So rather than having the ability to stretch an IRA or defer taxes for forty years, the son had to pay the taxes on the entire IRA distribution the year after his father died. Using reasonable assumptions, this mistake cost the son one million dollars over his lifetime.
Another time, a 55 year old retires from his company with a million dollars in a retirement plan. The advisor recommends using an IRC Code 72(t) election for the entire million dollars. Only a fraction of that money was needed for cash flow between ages 55 and 59. The result of the faulty advice was unnecessary massive acceleration of income taxes between ages 55 and 59. The appropriate response would have been to make an IRC 72(t) election for part of the IRA, not all of it.
Neither of these advisors is a bad person. As far as I know they might be wonderful spouses and loving parents. In fact, they could even be excellent money managers or product experts who have given excellent investment advice to hundreds of their clients. Where they failed, however, is not taking the time to become educated about IRAs and retirement plans or not seeking any additional help when they were confronted with issues related to IRAs and retirement plans.
It also grieves me to say that these types of mistakes are all too common and that terrible advice regarding IRAs and retirement plans is routinely provided to millions of clients. Avoid These Costly IRA & Retirement Planning Mistakes Do Your Research
If you are an advisor reading this, my suggestion, would be to read, study and attend some good seminars that will bring you up to speed on IRAs, Roth IRAs, and other retirement planswith good information you can really add value for your clients. Excellent sources for information include books by Seymour Goldberg, Ed Slott, Robert Keebler, Natalie Choate, Gregory Kolojeski, and of course my own book Retire Secure!.
If you are a client looking for an advisor and you have a significant IRA, I would suggest that you learn something about IRAs by reading a book by one of the authors mentioned above or conducting some other research. At a minimum, ask an advisor what expertise they have in IRAs and retirement plans. If the advisor’s answer is, “What do you want to know?” I would repeat the question, “What expertise do you have in IRAs and retirement plans?” If they provide some vague information, ask them what books they have read, seminars they have attended, or can they show you any credentials that would certify their expertise in the IRA or retirement planning area.
Lack of expertise in the IRA and retirement plan area could, in many cases, be of more consequence than an advisor’s ability to pick the appropriate investments.
Expert advice is particularly important during life’s significant transitions such as retirement and planning for your estate. Incidentally, important transitions are also a great time to have money transferred to a new money manager, one who hopefully is competent with IRA and retirement plan issues.