Home Stretch: Do This 5 Years Before Retirement

February 8, 2022

February 8, 2022: Retirement is a major goal for most people, but only 36% of pre-retired U.S. citizens feel that they are saving sufficiently. As the cost of living continues to rise and the future of social security remains uncertain, this concern is poised to become a crisis if Americans don’t develop a retirement strategy. This is especially important for middle-aged citizens who may be approaching retirement age in the next five to ten years. Consider the following key steps that every person should follow in order to prepare for retirement.

Plan for Tax Liability

One of the biggest curveballs that retirees encounter is a greater tax liability than they anticipated. Many people underestimate their retirement income and thus do not account for the tax bracket they may be in. It’s better to overestimate your tax liability instead when you are planning your retirement strategy. This can help you avoid falling prey to tax penalties and other consequences of unanticipated expenses. If you’re trying to do some last minute retirement preparation, stashing away extra cash for potential tax liability is a great idea.

Prepare for the Unexpected

Taxes aren’t the only unexpected expense that can rear its ugly head when you’re trying to retire. Medical bills, familial expenses, and other costs can arise and put pressure on your retirement budget. Similarly, sometimes the income you expect is delayed, as is often the case with pensions or social security funds. It’s always best to prepare for the unexpected and keep several months’ worth of living expenses in an easily liquidated asset. This may be a money market account or simply a checking account that can be easily accessed.

Diversify Your Investments

What should I do 5 years before I retire? Diversify your investments. You don’t want to rely on an up-and-down portfolio to finance your retirement. Diversification can massively reduce these ups and downs to ensure that you have a better shot at living off of your investments. An advisor can help you identify what the ideal mix of investments is and help you balance reasonable risk while achieving the best returns for your goals. Finding this balance is imperative if you are counting on investments as a source of retirement income.

Learn About Your Options

When it comes to retirement planning, nothing is more important than education. You need to learn about all of your options and find the plan that’s best suited to your retirement goals. Speaking with a professional consultant can help you better understand what resources are available. It can also help you develop a realistic strategy for saving and investing. Don’t put off retirement planning until the last minute. Take the reins and learn about how you can shape your own future.

About 1891 Financial Life

At 1891 Financial Life we don’t just sell policies, we offer possibilities. We pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a not-for-profit life insurance Society, which means the sales from these financial service products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs.

Our portfolio is extensive, ranging from various life insurance policies to our annuities to support your financial needs no matter what stage of life you’re in.