Retiring Soon? 3 Essential Steps Everybody Ought to Take Before 2025
Rewritten Article:
Are you approaching retirement, or do you still have several decades left on the job? Regardless of your situation, the end of the year is an excellent opportunity to confirm that your retirement plans are on track. Every person's retirement journey will have unique aspects, depending on their stage in life.
However, these three moves can significantly support any worker's retirement preparation:
1. Evaluate Your Estimated Social Security Benefits
If you've been employed and contributing to Social Security taxes for at least a decade, chances are you're eligible for retirement benefits. But before you retire, it's essential to know approximately how much you'll receive.
Just go online and set up a mySocialSecurity account if you haven't already. Once you have your account, you can check the estimated value of your future benefit. See how your benefit amount changes based on when you decide to begin claiming, with different predictions for ages 62, 70, and your full retirement age.
Keep in mind that if you plan on working for an extended period before taking Social Security, your benefit may change before retirement. But having this estimated amount can help you better plan your savings.
2. Maximize Your 401(k) or IRA Contributions
In 2024, you can contribute up to $23,000 each year to a 401(k) and $7,000 annually to a traditional IRA or Roth IRA. Maxing out your retirement funds can significantly bolster your savings, especially if you're saving in a 401(k) with a high contribution limit.
People aged 50 and older can contribute even more with catch-up contributions. Workers with 401(k) plans can add an additional $7,500 per year, while investors in an IRA can contribute an extra $1,000 annually.
Not everyone can invest the full amount, but if you can set money aside, contributing now can be smart.
3. Review Your Retirement Goals
The end of the year is a great time to reevaluate your retirement aspirations, such as your desired retirement age and the savings needed for a comfortable retirement. You might also consider factors like your preferred living location, how your retirement strategy may impact your spouse, and inflation.
Although some aspects are more relevant for those nearing retirement, all workers should plan their retirement savings goals and considering when to retire. You don't need to have every detail figured out, but staying aware of these goals annually will make adjustments easier as needed.
Planning for retirement requires time and patience, but making small progress each year can significantly contribute to a secure financial future. By consistently reviewing your retirement journey, you can set yourself up for long-term success.
After assessing your estimated Social Security benefits and realizing the potential impact on your retirement finance, you might consider adjusting your retirement savings strategy. Maximizing your 401(k) or IRA contributions can significantly boost your retirement money, especially considering the higher contribution limits for individuals over 50. As you approach retirement, it's essential to review your retirement goals and ensure they align with your vision for your post-work life, considering factors like your desired retirement age, desired living location, and potential impact on your spouse.
