Good news for your retirement planning: 6 ways you’re more prepared than you realize
Are you worried about your retirement readiness? You’re not alone; many Americans feel unprepared as they approach their golden years. A recent report from Clarify Capital, an investment group, 48% of Americans feel retirement will be unattainable in the next half-decade. This makes preparation for your future even more important.
Here are six ways you might already be on the right track.
Employer-sponsored retirement plans
Many U.S. workers have access to employer-sponsored retirement plans like 401(k)s, which provide a structured way to save for retirement. These plans often include employer matching contributions, effectively offering free money towards your retirement savings.
Social security benefits
Social Security remains a critical component of retirement income for many Americans. Understanding when and how to claim these benefits can significantly impact your retirement finances.
Delaying benefits until age 70 can increase your monthly payments by as much as 76% compared to claiming at age 62.
Tax-advantaged accounts
Individual Retirement Accounts (IRAs), including Roth IRAs, offer tax advantages that can enhance your savings.
Contributions to traditional IRAs may be tax-deductible, while Roth IRAs allow for tax-free withdrawals in retirement. If you’ve been utilizing these accounts, you’re leveraging powerful tools for retirement savings.
Defined contribution plans
Defined contribution plans, such as 401(k)s and 403(b)s, have become the backbone of retirement savings in the U.S. These plans allow you to contribute a portion of your salary before taxes, growing your savings more efficiently over time.
Government resources and tools
The U.S. government provides numerous resources to help with retirement planning, from Social Security calculators to benefit finder tools that can identify additional support programs. Utilizing these resources can help you better understand and optimize your retirement strategy.
Financial planning and adjustments
Regularly reviewing and adjusting your financial plan is crucial as you approach retirement. This includes estimating future expenses and potential income sources like pensions or investment returns. If you’ve been proactive in managing your financial plan, you’re already ahead in ensuring a comfortable retirement.
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