By Daniella Rand
When was the last time your life changed for the better?
Hopefully, this question brings back recent, pleasant memories. Think back: Did you feel as if you were responsible for that positive change, or that it was due to (fortuitous) forces beyond your control?
If the latter, perhaps it’s time you put yourself in the driver’s seat and made yourself the architect of a positive life change. What better way to get started than to implement some life-changing retirement planning tips?
Riveting, no. Essential to your financial future, and your family’s? Yes, absolutely. Consult with a financial advisor as soon as you can — see #1 — and begin implementing these six life-changing tips for retirement planning.
1. Connect With a Financial Advisor Who’s Committed to Your Success
First things first: Find a financial advisor whose investing philosophy aligns with your own, and who you can trust not to treat you as just another source of income. It’s important to take your time during this part of the process, as severing ties later on can be costly, time-consuming, and emotionally trying.
2. Learn the Basics of Saving and Investing
You can’t depend on your financial advisor for everything, of course. It pays to know the ropes around saving, investing, and general money management, even if you have no intention of managing your own portfolio anytime soon. Free financial education resources abound; take advantage of them! However, a good financial advisor should be able to give you some sound advice in this area, too.
3. Assess Your Risk Tolerance (With Help From Your Financial Advisor)
Work with your financial advisor to assess your personal risk tolerance, which may be higher or lower than others in your cohort. You’ll probably complete this step with your advisor during the onboarding process, but it never hurts to periodically reassess your tolerance after important life changes (such as the birth of a child).
4. Open Tax-Advantaged Retirement Accounts, If You Haven’t Already Done So
Set yourself up for financial success by opening an Individual Retirement Account (IRA) if you haven’t already done so and looking into any employer-sponsored retirement options for which you qualify. The more money you can grow in tax-advantaged fashion, the better positioned you’ll be to make the leap into retirement — or cover other major expenses, such as college tuition — when the time comes.
5. Take Advantage of Your Employer’s Qualified Plan Match, If Available
If you’re eligible for an employer’s 401(k) or other qualified plan and your employer matches contributions up to a certain dollar amount, take full advantage of that deal. Look for ways to maximize your contributions up to the match, even if it’s a stretch to do so.
6. Use Supplemental Tax-Advantaged Accounts to Further Grow Your Wealth
Health savings accounts? 529 education savings plans? Coverdell ESAs? If you’re eligible for these and other plans, and you can use the funds as intended to retain the plans’ tax advantages, talk to your financial advisor and determine how you’d like to proceed.
Give Yourself the Gift of Financial Security, Now and Tomorrow
Taken together, these tips offer something incredibly valuable: the gift of financial security. Even better, they’re well within the capabilities of the average consumer, especially when working closely with a seasoned financial advisor.
The time is right for you to take control of your financial future, and you have all the tools you need. What are you waiting for?