These little-known tips can help you reach a worry-free retirement quickly
Most people know the common advice for saving for retirement: delay Social Security, save more and work longer. That is great advice, but these little-known tips can help you reach a worry-free retirement even faster.
Forget “the Number”
Many people spend their lives hoping they have saved enough to retire. They pick some arbitrary number, like $1 million, and worry whether that will be enough. In reality, there is no specific amount of wealth that will suddenly allow you to retire. Instead of focusing on “the number,” concentrate on the income stream your wealth can support. That number varies according to many factors, like interest rates.
Asset Allocation Matters
“Asset location” refers to which accounts house which investments. Try to keep as much wealth as you can in a tax-deferred account, like a traditional IRA or Roth IRA. Doing so will minimize taxes and stretch your wealth further [3].
Plan for a Long Life
The average life expectancy for someone born today is 78, but there is a good chance that a 65-year old today will live to 95. Plan for a long life so you don't run out of your savings at 80.
Think of Money as a Tool
Money is certainly important, but do not let it dictate all your decisions. As you plan for retirement [4], spend more time building your relationships than worrying about your assets. These non-financial assets will be just as important, if not more so, than your financial assets during retirement.
What financial tips are you following as you prepare for retirement? Share your best advice with our readers in the comments section below.