Your retirement deserves to be all fun and no worries, yet with rising living costs, many retirees do indeed worry. Meeting the higher costs with a fixed, and even dwindling, income is stressful. Add in the fact that we’re living longer than ever, and your financial situation can sit over your future like a dark gloom.
The good news is that you do have options. If you are still working, then yes, you have more options than those who are currently retired, but there’s always hope for a golden retirement when you use these top five tips:
1. Get Professional Advice
If you want to make the single biggest boost to your financial situation, then you need professional wealth management. There’s no way around it, either, unless you are a financial advisor yourself. This is because wealth management includes everything from tax planning to asset and risk management to estate planning. Only when you have everything working in your favor can you start to make leaps and bounds towards long-term financial stability.
A wealth advisor will be able to help you finally pay only the tax you owe, take advantage of current deductions, and then help you make your money go further with select investments to your retirement, IRA, and investment portfolios.
2. Increase Your Pension Contributions
Now is the time to make as many catch-up contributions as you can. Currently, everyone working can make contributions to their 401(k), 403(b) and 457 plans up to $24,500. Maxing out to that limit, or as close as you can get, should be your goal.
You can also make an annual contribution to your IRA up to $7500. If you are over 50, you can make an additional contribution of up to $8000 per year, up to $32,500.
3. Plan to Downsize
One of the best ways you can make your retirement fund go further once you retire is to downsize. If you own your own home, then you can:
- Sell your home and put that money in your investment and retirement portfolios.
- Rent out your home and use that rental income to supplement your pension.
- Rent out a room or guest house while living in the property to supplement your pension.
All three are great ways to make better use of a family home when you retire.
See also: Why Environmental Due Diligence Matters When Buying a Business with Commercial Property
4. Take Advantage of All Tax Deductions
There are countless tax deductions that you can make to help keep your money in your pocket, so that you can then place it in a savings or investment account. For example:
- Retirees can make tax-free payments to certain eligible long-term health plans
- New car owners can deduct their auto loan interest until 2028
- Small and medium business owners can write off depreciation on most assets until 2030.
These are just a few of the tax deductions that you can make.
5. Reduce Your Debt
Finally, address your debt. If you are currently still working, then take the time now to aggressively pay down your debts or work to get them forgiven. If you do have to carry on debt into retirement, see if you can address it upfront by selling an asset, or work it strategically into your budget. You could, for example, consolidate your loans into one if necessary.
