Knowledge of a few specific financial concepts is often the key to get ahead. By taking a bit of time to acquire the knowledge necessary for retirement investing, you can often reach financial independence sooner. Here are a few things you should learn about preparing for retirement that will help you to more efficiently reach your goals:
Learn about your own health. One of the highest costs in retirement is going to be health expenses. One significant health problem could be enough to severely cripple anyone's retirement plans. While accidents can happen at any time, a prudent strategy to severely reduce risk is to continually monitor your health by regularly scheduling a physical exam and addressing the deficiencies that the exam finds.
Learn how to maximize Social Security income. The age you sign up to start receiving Social Security income can affect hundreds of thousands of dollars in benefits down the road. This complex decision is even more complicated for couples, who have more opportunities to maximize their benefits by thinking about their finances as a whole. With taxes on Social Security income also playing a role, the age you claim Social Security is a serious area that every retiree should investigate.
Learn to minimize tax liability. Most retirees will be able to find ways to reduce their taxes because they are likely to have a smaller income in retirement. Strategies such as converting part of a traditional IRA to a Roth can significantly reduce the tax bite of retirement account withdrawals, which is more money in the pocket of the retiree.
Learn to search the web for deals. Whether it's going to a site like CouponShoebox.com to look for online promo codes before making a purchase or spending the time to comparison shop on a new car insurance policy, every retiree should learn the art of getting the best consumer deal now that time is less of an issue.
Learn to match your retirement cash flow with your expenses. One of the simplest ways to make sure you'll be comfortable in retirement is to test drive your budget ahead of time. Before you call it quits, try to live on your projected retirement income and see if you can make the numbers work. If not, you still have time to make adjustments because you still have a paying job. This will not only make your finances more solid, but you will also feel more comfortable with your retirement plan, which could reduce a tremendous amount of stress.
Learn how your significant other thinks about retirement. You may have aspirations of an early retirement, but make sure everyone in your household is comfortable with this decision. Retirement takes planning, commitment, and understanding for all the parties involved, and communication is key to making this happen. Don't be the couple that is working toward different goals.
David Ning runs MoneyNing, a personal finance site that shares money moves you can make to significantly increase your chances of having a comfortable retirement. He likes to share simple changes that anyone can make, such as picking the best online savings account and figuring out whether a 0 percent balance transfer credit card makes sense.
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