How to Plan Retire in 10 years:
If you are planning to retire within the next 10 years, after decades of working, you may finally see retirement on the horizon. But now isn’t the time to coast, and you should consider taking these steps to enjoy a comfortable retirement lifestyle. Examining your income in advance of your target retirement date gives you time to make necessary adjustments. Start by envisioning a realistic picture of the financial resources you may need to support your plan. In this blog, we discuss a step by step plan to retire in 10 years.
Make sure you’re investing for growth
It can be tempting to shy away from stocks, but the growth that stocks provide is important. At this stage of your life, consider maintaining stocks, mutual funds, and liquidity needs. Examine your income sources in order to help you generate the kind of income that you will need to cover expenses in retirement. Make sure your portfolio is in line with your investment for your retirement plan.
Take full advantage of catch-up contributions
Whenever possible, increase your retirement contributions to the maximum in 401(k), IRAs, or other retirement plans. Aim to put enough into your 401(k) to qualify for the maximum matching contribution that your employer offers. If you’re 50, rules for catch-up contributions let you set aside more than the usual contribution. As you near retirement, account consolidation simplifies your investment, combining IRAs of the same type, with one institution.
Downsize your debt
Consider accelerating your mortgage payments, and that the loan will be paid off before you retire. To curb new credit card debt, try paying cash for major purchases, and reducing existing debt. By this, you can minimize the amount of retirement income that will be spent on interest payments. If you pay off a credit card that charges 15% interest, it’s like earning 9.9% on a risk-free investment.
Calculate your likely retirement income
Estimate your predictable income, Social Security, and employer pensions to prepare a step by step plan. The rest of your retirement funds will come from your wages, savings, and investment accounts. To make your assets last your lifetime, your rate of withdrawal should be personalized. And based on a variety of factors, such as age, gender, and risk tolerance, including:
- Postponing your retirement date and working longer
- Reducing your discretionary expenses
- Deferring Social Security payments, each year you delay, your monthly benefits grow by 8%, until age 70
Estimate your retirement expenses
Some expenses, such as health care, might be higher, while others, such as clothing costs, may decline. What you spend, while you’re still working will depend on how you live during retirement. If you expect to travel, your projected costs might even be higher than they are now.
Consider future medical costs
If you retire at age 65, Medicare will cover the majority of your routine health care costs. But you may consider supplemental coverage to help pay for your nonroutine health care expenses. They are likely to rise as you get older, moreover, Medicare doesn’t cover most long-term care costs. To help protect your retirement, consider buying long-term insurance, such as home health aides. If you have a health savings account, consider putting in the maximum, the money is tax-advantaged.
Plan where you will live
Where you retire could have a big impact on your expenses; move to a condo in a low-tax state. Your expenses could decline sharply, perhaps freeing income to pay for other priorities you may consider. Another option is staying in your town, but moving to a smaller home that’s more financially manageable. On the other hand, you might elect to live in a cosmopolitan city — a move that could require you to economize.
It’s never too late to get started
When your planned retirement date is a decade away, it’s important to plan carefully. Set realistic goals so that time is on your side and you have the means to enjoy the sort of retirement you have always dreamed of. Even if you started saving for retirement late, there are steps you can take to increase your retirement savings. It’s never too late to get started. This brings us to the end of our discussion, a step by step plan to retire in 10 years. Do share some of your thoughts on the topic.
