According to the Pew Research Center, the US retired population (aged 55 and over) grew to 3.5 million retirees in 2020. This number is a huge increase from the 2019 figures. In that year, the retirement population only grew to roughly 1 million retirees per year.
The recent COVID pandemic crisis has caused many of these professionals to reflect on their lives and change their priorities. Regardless of the reason, these retirees also knew that it was critical to plan for this time in their lives.
Learn more here on how to plan for your “golden years” with these retirement planning strategies. Do your homework now so that you can enjoy that benefit you’ve worked so hard to earn.
Read up on these retirement tips. You’ll find the best long-term planning vehicles to grow your nest egg.
Contribute to Your Employer’s-Sponsored 401(k) Plan
If you have an employer-sponsored 401(k) retirement plan, start adding to it now. You can invest small amounts from your monthly paychecks before taxes are taken out. These small payments will also bring down your current taxable income rate while you pay into something that will benefit you in the future.
Invest Your Tax Refund
Another retirement strategy is to immediately submit any state or federal tax refunds back into your retirement plans. Use IRS Form 8888 to deposit your refunds directly into your retirement account. Then watch as your retirement account earns interest from your refund deposit.
Open an IRA
You might find that opening an individual retirement account (IRA) might be one of your best ways to save for retirement. An IRA is an account created by a professional planning adviser or financial institution that allows you to save for retirement on a tax-deferred basis.
An IRA comes in two forms: traditional and Roth IRA. You can deposit pre-tax dollars from your paycheck to a traditional IRA. You won’t be taxed until you withdraw them.
Roth IRAs are funded with after-tax dollars from your paycheck. Withdraws from a Roth IRA are tax-free.
Open a Self-Directed IRA
A Self-Directed IRA is different from a Traditional or Roth IRA. The main difference is that the investor can make their own investment decisions with the Self-Directed IRA.
Next Steps After These Retirement Planning Strategies
There are plenty of ways to save for retirement that are within your reach today. Start now while you’re young and your money has time to grow.
Check with your employer’s HR department to get the details on your employer’s-sponsored 401(k) plan. If they allow you to contribute as well, check to see if you are meeting your company’s minimum deposit amount.
Find a financial service professional who can help you plan and establish your own IRA. They will be able to advise you on any traditional or self-directed IRA as well as other retirement planning strategies.
Don’t forget to check our website for more how-to advice. You’ve waited your whole career to enjoy your retirement. Plan now and you’ll have the nest egg you need to live the retirement of your dreams!
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