How much do you need to save for retirement? What’s the safest plan for your retirement savings today, and will that change as you get closer to retiring? How can small changes now add up to meaningful retirement income in the future? People are right to ask these and other important questions about retirement. It’s easy to think about retirement savings as a future problem, but the solution happens now. Whether you’re founding a start-up, building a family, or building on a lifetime of career successes, this is the right time to think about your long-term financial security. Your CPA is your most valuable financial planning resource, and here are some points to discuss with your accountant.
Getting Started: Retirement Planning in Your 20s
Do you have a retirement plan?
There’s no such thing as “too early” when it comes to long-range financial planning. People in their 20s today may not be retiring until the 2050s and 2060s, but a small investment now pays significant dividends that far into the future. Depending on your income and your goals, retirement planning can take a back seat to building up savings or gearing up to start a business today, but with help from an experienced accountant, it’s usually possible to find something to set aside for retirement.
Investing in a 401(k) plan, especially if you work with an employer who matches funds, is often an excellent way to shelter current income for tomorrow’s use. This is also the best age at which to invest in a portfolio that’s more volatile in the short term; with more time to cushion you from risk, your chances of seeing greater growth in your retirement savings increases.
Becoming Established: Financial Planning for Your 30s
For many people, the 30s are a decade of personal as well as professional change. Starting a family, launching a business, buying a home, investing in property – these and other major milestones mark this decade. Even with a higher income than you enjoyed in your 20s, you may find saving a greater challenge as changes to insurance, increases in your emergency fund, and mortgage payments rise. Your tax returns also become more complex, particularly if you’re starting a business or setting aside savings for your family.
In Your Prime: Retirement Savings for 40-Somethings
The 40s are prime investment years. You typically earn more than you did earlier in your career and may have established your own business, yet retirement is far enough away that you can still incorporate higher-risk, higher-yield investments in your portfolio. Many people find their financial futures are more readily foreseeable, particularly with guidance from your CPA. Services that help you handle personal and professional tax preparation are increasingly important for wealth protection, ensuring tax compliance while preserving your wealth for other goals, including retirement.
Gearing up for Retirement: Saving in Your 50s
You’re still more than a decade away from early or full Social Security retirement eligibility, but for many people, celebrating a 50th birthday marks the starting point for making concrete retirement plans. Family expenses for child care and education are usually past, and earnings are often higher than ever, which makes your 50s an outstanding time to devote more of your income to retirement savings. Although you’re closer to retirement, you still have a cushion of many years, but it’s still a good time to reassess your portfolio in light of how and when you want to retire. Is it time for you to shift your portfolio toward lower-risk investments? Are you saving for a particular personal or professional goal? Talk with your accountant about choices that are right for you.
Retirement Planning in Your 60s and Beyond
As you move into your 60s, retirement may be just around the corner – but increasingly, it isn’t. For many business owners and entrepreneurs, retirement from one career means launching another. Whether you plan to invest in real estate, write the next great American novel, or blog your travels around the world, your financial advisor can help you realize your post-retirement dreams. Speak with your CPA and learn more about planning your financial future for the years and decades still to come.
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