Keeping busy with their career and family, baby boomers fail to comprehend the need for financial planning for their retirement with a pressing urgency, in spite of it being on their agenda. They always keep thinking they have time and when the need comes, they would manage their retirement smoothly but it is only when the clock strikes ‘time up’ that they run haywire, not sure how to cover up for the lost years. According to a recent report issued by Financial Finesse, it was observed that baby boomers were the strongest group financially in comparison to other age groups, yet more than 60% of them were not very emphatically sure about their retirement plans. This post will give you ideas for baby boomers looking to retire in the next 3-5 years.
Well, looking at it this closely, the baby boomers are definitely in an urgent need to initiate a retirement plan as their retirement is right on the head and their time period to cover it is very short. As rightly said, ‘it is never too late to begin’, baby boomers can implement on the following steps to face the challenge sprightly:
Invest in 401(k):
A study by Ameriprise Financial revealed that only 24% of the baby boomers were affirmative about having kept aside funds for retirement. A major percentage of them revealed to having their funds involved in supporting their children. The first step to initiate towards planning would be to cover those loopholes of getting weaned off and maximize your investment in 401(k) saving plan.
According to Nicholas Camp, president of NRC Wealth Strategies contribution amount in 401(k) plan in 2018 is up to $24,500 for people who are 50 or more and up to $18,000 for people below 50 years of age.
Evaluate your expenditures:
It is important that you evaluate your monthly spending in comparison to your income. Make a list of all the expenses and keep aside a budget to manage those expenditures. What we are trying to emphasize is that it is essential that you monitor how you spend your hard earned money and try to save as much as you can. It just makes retirement easy!
Do not keep future debts:
Try and wipe off all your loans and credit payments before retirement. Your only source of funding for your retirement is your income. Do not let this income be spent in paying back loans. The only way you can do this is by paying back the debts at a faster rate and less time. Maneuver your income and expenditure ratio and work on it.
Keep all your cards on the table:
Work out your objectives after retirement. This will give you a better insight into how you can go about achieving your retirement goals.
It is also essential that you calculate how much you are likely to receive in form of social security benefits after retirement. This calculation, done through online retirement calculators, helps you perceive your future goals.
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Streamline your retirement planning steps:
If you are paying for your retirement from your income it would be optimal if you streamline the payments in such a way that the retirement savings are deducted automatically from your income and deposited where they need to be. It will save you trouble and mental exhaustion.
Kicking in and just a start is all you need to begin your ride into a safe and financially sound retirement.
Baby boomers do not have much time left for their retirement and to cover up this short lapse, they would have to take some immediate steps so that their retirement can be smooth and hassle-free. For professional help on how to start planning retirement, book a free consultation with our experts here at Flagship Financial