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Here are 14 essential retirement rules from experts to help younavigate your retirement strategy.
Instead, focus on what it’s possible for you to do today to improve your financial situation.
Pay Future You First
Its crucial to prioritize saving for your future self.
Too often, we give in to lifestyle creep, increasing spending with every raise or bonus.
Start Saving Early and Be Consistent
The power of compounding interest cannot be overstated.
There are no substitutes for time and consistency.
Counterintuitively, the biggest mistake many people make in investing is not taking enough risk, said Johnson.
He also warned, however, that fortune doesnt favor the stupid.
Dont attempt to Time the Market
Market timing is fools gold, said Dr. Johnson.
But if you missed the markets 10 best days, youd only have half of that.
If you missed the best 30 days, your balance would be only $11,701.
Johnson stressed that continuity is better.
Dollar-cost averaging into anindex mutual fundor ETF is a terrific lifelong strategy.
Asher Rogovy, chief investment officer atMagnifina, agreed with this strategy.
By investing at consistent intervals, investors can avoid the risk of overpaying.
If stock prices decline, they buy in at a lower average cost.
If instead, the market goes up, they wont have overpaid.
Rogovy explained, This is free money and is almost always more impactful than any other retirement investing decision.
Be sure you are retiringtosomething rather than justfromsomething, he said.
Aim to be able to fund your retirement by withdrawing only 4% from your nest egg per year.
Thisretirement calculatorcan help model different scenarios.
This can help you preserve more of your savings.
Johnson added, Contributing the max to your 401(k) also reduces your tax bill.
Prepare for Market Volatility
As you approach retirement, gradually shift to more conservative investments.
Gammon advised regularly reviewing asset allocation to protect against market downturns while still maintainingsome growth potential.
Johnson emphasized the importance of staying disciplined.
A solid plan helps you weather market ups and downs without making costly, emotional decisions.
Rogovy added that its important to, Estimate your Social Security income.
The Social Security Administration provides thisbenefit estimate calculator.
Include room in your plan for retiring early if necessary to prevent future financial stress.
At the same time, Urban said, Do not retire just to stop working.
Planning for the personal life changes that come with retirement are as important as the financial planning.
Regularly refresh your Plan
As life changes, so should your retirement strategy.
Along with refreshing your plan, review your current retirement savings and contributions.
If possible, increase your retirement account contributions, even if by a small amount, said Gammon.
Regularly review your asset allocation and adjust it according to your age and risk tolerance.
Seek Professional Guidance
Feeling overwhelmed?
Dont hesitate to reach out to a financial advisor, just as you would a medical or legal professional.
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