The chief financial officer of Phonexa, a comprehensive marketing platform for calls, leads, clicks, emails, SMS, accounting, and more, is Mara Garcia.
Although many people consider inflation to be a short-term problem, the effects of a greater cost of living can have a disastrous impact on one’s long-term financial planning. This is especially true for those who are approaching or making retirement plans.
Although inflation is just temporary, it nonetheless has a long-lasting effect. Essentials may become more costly, savings may be reduced, interest rates may rise, and borrowing costs may increase as a result of inflation. For the majority, this necessitates a future review of retirement arrangements.
Many people are delaying retirement to give themselves more time to build an appropriate nest egg for their post-retirement years in order to assist prepare for the financial uncertainty that comes with retiring in the middle of fast inflation.
I’ve had expertise working with people to create retirement plans that meet their financial goals during my career as a CPA and independently as a CFO.
Consider the following advice if you’re one of the soon-to-be retirees who’s postponing retirement to help you make the most of your money and live more comfortably after your working years are over.
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People who are debating whether to retire or not should think about deferring their Social Security payments before applying for retirement.
For individuals who choose to continue working through the full retirement age of 66—or 67 if you were born in or after 1960—delaying retirement benefits until after that point can be a significant financial incentive. Delaying benefits until after your full retirement age will boost both your retirement benefits and your entire lifetime payouts.
Also, keep in mind that if you get benefits prior to reaching full retirement age and then go back to work, your yearly income is subject to a cap. Within a year after declaring retirement and beginning to collect Social Security benefits, you will be taxed back for any benefits you received.
Delaying retirement benefits is certainly something worth thinking about for people who believe that staying in the workforce is a viable alternative.
Reviewing Your Financial Situation
The moment has come for you to reevaluate your present financial situation, including your income, spending, savings, investments, and other financial commitments, as inflation continues to impact retirement plans throughout the nation. By doing this, you’ll be able to calculate the maximum amount you’re able to put into your retirement accounts. Consider exceeding the IRS yearly contribution limit if you have a 401(k) plan and are able to invest more.
Your retirement investments should be diversified as well. Do you have a 401(k), an IRA, or a Roth IRA that holds all of your assets? In that case, it can be beneficial to diversify your retirement investments in order to increase flexibility and safeguard your assets.
Don’t forget to consider any tax advantages you could be eligible for when increasing your retirement account contributions.
Future Planning With A Financial Planner
It’s a common misperception that retiring is a one-time occurrence. However, as the 2008 stock market meltdown demonstrated, a number of external circumstances may have a direct impact on your retirement preparations.
The main goal of meeting with a financial planner is to educate yourself. A financial planner can help you examine your alternatives and create a strategy for the future. You may evaluate potential for passive income from these talks, develop an investment plan (stocks, real estate, etc.), and remain up to date on tax legislation and incentives that you can take advantage of.
You can speak with a someone you know and trust who has experience in money, such as an accountant, banker, or tax specialist, if you can’t afford to meet with a financial planner. The goal, as always, is to educate yourself on various retirement possibilities as well as strategies to increase and safeguard your nest egg.
Getting ready for retirement might seem daunting, especially in tough economic times, but it doesn’t have to
Young professionals who are planning their retirement should be flexible with their assets, in my opinion. To better safeguard your financial stability when it comes time to retire, diversify where your savings and assets are housed and avoid putting all of your retirement eggs in one basket.
If you’re a professional who has reached or is about to reach retirement age, taking into account the suggestions above might help you optimize your benefits and enjoy the retirement you’ve worked so hard to earn.
This material is not intended to be tax, financial, or investment advice. For guidance on your particular circumstance, you should speak with a qualified specialist.