4 Cornerstones of a Solid Retirement Plan
The day to retire will eventually arrive. Planning for retirement must be a critical priority since working full-time might not be possible once someone reaches a certain age or health point. Many smart steps make retirement financially painless, but a surprising number of people aren’t sure at all what to do. The following four points cover some of the more important things to ponder.
A ROTH IRA is a little different from a traditional Individual Retirement Account. With the latter, you take a tax deduction when putting money into the account. Withdrawals are taxable. With a ROTH IRA, things work the opposite way. Money put into the account is taxed, but the withdrawals aren’t. For someone worried about living on a fixed income in the future, a ROTH IRA might be more beneficial. Be aware you must meet specific criteria to take advantage of a ROTH IRA.
Will and Trust
In the event of your passing, your estate goes to your heirs. A will allows you to designate who gets what. Without a will, the process becomes more difficult for heirs as they must go into court and accept the judge’s decision. Yes, a will must go through probate, but the process shouldn’t be too bothersome for heirs unless someone has legitimate grounds to contest the will. Ultimately, with a written will, your decisions are likely final. Probate can be a complex process, and who in their right mind would want the government (and its track record of handling money) deciding where their assets go?
Plans for Passive Income
Passive income refers to strategies for earning money with little effort. Investing money in income funds that pay dividends represents one strategy for passive income. Designating rooms in your home for Airbnb rentals could be another strategy. Maybe writing about your favorite hobby and publishing eBooks on Amazon might work for you, too. Reasonable passive income strategies do exist. Look for the one most beneficial for you.
A Strong Credit Score
A good credit score can make life easier in many ways. With a decent score, borrowing options won’t have limitations or come with high-interest rates. A decent credit score looks good on a background check, which proves helpful when intending to move into a retirement home. Take steps now to improve your credit score. You want the best possible credit when you hit retirement age.
All retirement planning should occur many years ahead of age 65. The earlier you start your preparations, the better prepared you will be financially for when you retire. You want yourself in the best position when the golden years arrive. Don’t put planning your retirement off and deny yourself the solid retirement that you deserve.