When it comes to retirement planning, no two people are the same. The situation you are facing will not be identical to the next person. While you are sure to have a number of questions, the best thing you can do is focus on your particular situation as opposed to what everybody else is doing.
Even with this in mind, there’s something to remember: you can learn a lot about retirement planning by learning from other’s mistakes and doing your best to avoid them on your own time.
An IRA, for example, is one of the best retirement vehicles. It doesn’t matter if you use a traditional or Roth IRA, you are sure to find yourself in better position in regards to how much money you are able to save.
Unfortunately, many people don’t learn enough about IRAs. Taking this one step further, they never take the time to focus on retirement planning. Instead, they hope that everything works out and that they are able to retire when the time comes in the future.
We discuss this topic time and time again on our website and blog, while also providing hundreds of people with the retirement planning advice they require. Here are the six steps you need to keep in mind as you get started with retirement planning:
- Survey your assets.
- List key relationships.
- Organize important papers.
- Estimate how much money you will need.
- Define your goals.
- Get professional guidance.
These are the types of steps you need to take. As you can see, some are easier to complete than others. For example, you may already have a list of assets. Conversely, there are steps that are much more difficult to understand, such as how much money you will need once you have passed on.
The Motley Fool recently published an article entitled “Here’s How Much the Average American Has in an IRA, Sorted by Age.”
You don’t want to get so caught up in what others are doing that you overlook the importance of your own situation, but it’s this type of data that can give you a better idea of whether or not you are on the right track.
Here is an excerpt from the study that may change your mind about IRAs and retirement planning in general:
“The average IRA balance tends to increase as time passes, which is what we’d expect. There’s an odd divergence in that people under 25 have more in their IRA, on average, than those between the ages of 25 to 29, but I believe this can be explained by the steep dive of the U.S. stock markets during the Great Recession, and new workers being too skeptical to invest in the stock market roughly eight years prior. If workers under 25 are getting an earlier start, it would explain this divergence.”
If you only take one thing out of this, let it be that you want to see your IRA balance increase as time goes by. This sounds simple enough, but it only happens if you pay close attention to your investments, while also leaving your money put. As tempting as it may be, don’t tap into your IRA before retirement. This will undo all of the good work you have put in to date.
Do you have questions about retirement planning and how this fits in with your estate plan? Do you want to discuss the finer details of contributing to an IRA, including how this will impact your situation in the future?
If you answered yes to either question, now is the time to contact us for professional advice and guidance. In addition to reviewing your current situation, we can provide you with answers to all your questions. This will help clear the air, ensuring that you feel good about the plan you have in place and the progress you are making.
There is a lot that goes into retirement planning, and you need to take a personalized approach to ensure that you are doing everything you can to put yourself in position for future success.
We would love to help, so don’t hesitate to contact us online or via phone.
- What You Need to Know About SECURE Act 2.0 - March 30, 2023
- Show Your Love by Creating an Estate Plan - March 15, 2023
- What Happens When You Don’t Trust Your Trustee – Part II - March 7, 2023