Nearing Retirement - Ten Essential Tips
Ramp it up. Pump up your retirement saving by increasing your contribution to your 401(k). New contribution limits let you stash more dollars in your qualified plan than ever before.
Save automatically. Consider setting up automatic deposits to a mutual fund or IRA. (Such a plan does not guarantee profits or protect against loss in declining markets.) When you get a raise, consider directing all or part of it to your retirement savings
Check your strategy. What will be the right investment mix for you once you are retired? What is your current investment mix? Take advantage of this opportunity to rethink your investment strategy.
Get covered. Review your life insurance coverage and consider long-term care protection. While it may seem an impossibly long way off now, preparing now could save you thousands later and give you the ability to choose your own care.
Be a little selfish. Many people who are nearing retirement are also paying for their children's college educations. Remember how the flight attendant tells you to put on your own oxygen mask before helping others?
Don't let a job change pull you off course. If a great career opportunity comes along, take review every how changing employers may affect your future. Depending on your situation, consider getting professional advice as you weigh your options.
Investigating your options. Determine the impact of early retirement on your retirement benefits from your employer's plan. Learn the difference between taking a lump sum payout and income for life. This is another situation where you may want professional advice.
Think ahead. Start thinking about your estate before you retire. Under new laws the estate tax was repealed, but if it isn't reinstated after 2010 and your estate is large enough, your family may have to pay taxes. Consider ways to structure your retirement income to benefit your estate.
Consider the effect of taxes. Look for tax-deferred and tax-exempt investment opportunities. Take advantage of the provisions of the recent tax reform legislation that apply to your situation.
Stay the course. Don't let a new car or a vacation lure you off course. Make your retirement a priority now, and you'll have more money to spend on all the things you want in life later.
For more in-depth information, visit American Express Financial Advisors.
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