Retirement can be one of the most fulfilling times in life, but getting there comes with its own set of challenges and learning experiences. While reflecting, there may be some tips and advice people wish they had taken sooner or not at all.
In our Medicare Q&A Facebook group, we asked retirees what retirement advice they’d give to their younger self. Many shared a lot of valuable insights and advice they wished they had taken, and others were able to share the retirement tips that worked out for them as well.
Here are some top tips from those who have been through it and come out the other side for those who are preparing their retirement plans now.
Start Saving Early
As expected, one of the most common pieces of advice is to start saving for retirement as early as possible. Many retirees emphasized the importance of contributing to a 401k plan right from the start of their career and saving consistently from a young age.
As one group member put it, “Start that 401k early…because retirement is here before you know it!”
Retirees also mentioned getting in the habit of saving at least 10% of their gross income, including any additional revenue such as bonuses and annual raises. As income increases, the amount put into one’s savings should increase, too.
To wrap it up, save, even if it’s only a little each month. Saving earlier and for longer will allow you to reap the benefits later.
Taking Full Advantage of Employer Benefits
Retirees often stress the importance of taking advantage of employer benefits, especially a 401k matching program. When it comes to 401k contributions in particular, always strive to save at least as much as your employer will match.
A company that cannot provide retirement savings assistance, like a 401k, may not be in your best interest if you want to maximize your savings.
If you don’t have access to an employer-sponsored 401k program, consider opening an account outside your employer, such as an IRA (Individual Retirement Account).
Another aspect highlighted was the importance of rolling over your 401k plan to your new employer’s plan whenever you change jobs to avoid managing multiple accounts later in life. “It’s easier to pull from one pot than six pots,” one group member simply put it.
Although this type of benefit has been slowly dissolving over the years, those with access to a defined benefit pension plan mentioned the importance of securing such benefits whenever possible.
If your employer offers a high-deductible health plan, contributing to a Health Savings Account (HSA) can also be beneficial. Letting those HSA contributions build will also come in handy once it becomes time to pay for healthcare during retirement.
Diversify and Plan Your Investments
Investment diversification is a key strategy for managing risk and ensuring a steady income in retirement. We received tons of feedback about diversifying investments and generating multiple passive income streams. Our group members also agreed on the importance of finding a good financial planner to help them navigate these investment decisions and retirement accounts.
There are tons of singular pieces of advice retirees have to offer:
- “Fund a Roth IRA and then keep rolling the Roth into high-yield CDs.”
- “Roth funds and Traditional funds are the most important for future withdrawals.”
- “Open an interest-bearing savings account.”
- “Do not accumulate credit card debt.”
People will also have agreements and disagreements about all the advice you get. Prioritizing financial education ensures you know which moves work for your unique situation.
Educate Yourself and Seek Professional Advice
Many retirees wish they had educated themselves more about retirement and finances and sought professional advice earlier in their careers.
Research. Learn. Analyze.
It’s not the most interesting topic in the world, but it is important to learn so you can understand and be in control of your finances.
Learn from friends’ and family’s successes and failures. Learn the different financial concepts that can make or break your retirement plan, such as interest, stocks, various retirement plans, and bonds.
https://boomerbenefits.com/advice-retirees-wish-they-knew-sooner/