Planning for your retirement will ultimately give you great happiness and contentment. Know your options.
best way to ensure a happy retirement is to plan for it and, of course, the earlier the better. No matter where you are in your working life, you can take steps now to help create a viable and rewarding retirement. In fact, the more you learn about your retirement options, the clearer you can be about what makes sense for you. You need to ask yourself questions like:
What do I want my retirement to look like? What will I do with my time?
How do I check my Social Security earnings and benefits? How are my Social Security benefit amounts calculated?
Can I take money out of my retirement plan early?
These are just a few of the questions you must consider when you start planning for retirement; becoming more informed about the various processes that are involved will help you remain more stress-free throughout the planning process.
Planning for Retirement
It’s never too early to plan for what you will do in your golden years. To start, take a few minutes to write down the things you expect to be actively involved in. Don’t count solo activities such as reading, watching TV, or jogging. While fine in themselves, they are not likely to keep you energized and interested for long. Be as specific as you can. For example, if you plan to participate in charitable activities aimed at helping educate Third World children, with whom will you work and what will you do? Keep in mind that participating in just a few activities won’t keep you interested in life and interesting to others. So if your list consists of travel, adult education courses, and golf, you’ll need to do more planning. Consider things like working part-time, volunteering, and exploring hobbies.
Periodically checking your estimated Social Security benefits serves several purposes: it helps you plan for retirement and allows you to check for and correct errors. The Social Security Administration (SSA) keeps a database of your earnings record and work credits, tracking both through your Social Security number. You can see this information on your Social Security Statement (SSS), which is available to everyone age 25 and over. The SSS also gives you an estimate of the benefits you’ll receive at retirement age, which can plan an important role in your financial planning.
If you need to dip into a retirement account—whether it’s a 401(k), IRA, or something else—before you retire, you’ll likely pay a penalty. If you take a distribution from your retirement plan early (meaning before the day you turn 59 ½) you will generally have to pay a 10% early distribution tax above and beyond any regular income taxes you may owe on the money. The extra 10% might be called a tax, but it looks and feels like a penalty. In fact, the early distribution tax is the cornerstone of the government’s campaign to encourage us to save for retirement—or put another way, to discourage us from plundering out savings before our golden years. There are, however, a few ways to avoid the penalty. We recommend looking over the IRS’s FAQ on Substantially Equal Periodic Payments.
There are plenty of ways to do retirement, just as there are plenty of ways to do a career. You can leave your career, but turn your hobby into part-time work, or you can stop working altogether. Your goal should be to create the ideal vision for your life, your needs, your desires and, if applicable, your family. Whether you want to use your retirement to sail around the world or lie on the couch and read romance novels, it’s important to know what you want and put a plan into place to get it. Contact us today to see what Elite Insurance Solutions can do for you!