Preparing for retirement is a daunting task, and many people have trouble even getting started with retirement planning. Even though there are many aspects to planning for retirement, you shouldn’t let the magnitude of this important effort paralyze you into inaction.
The three retirement rules you’ll find discussed here don’t cover every aspect of your retirement planning, but they do introduce key concepts that can apply to several different commonly encountered situations. By keeping these rules in mind, you’ll be in a better position to retire comfortably and feel secure in your golden years.
Rule 1: Put yourself first
One challenge many retirement savers have is figuring out how to balance the competing priorities for their money. In the heat of the moment, it can be difficult to find money to set aside for decades into the future when you have much more immediate needs for your available cash. Yet in many cases, you’re better off leaving those short-term needs underfunded to achieve the longer-term goal of financial security in retirement.
One of the most common examples of this phenomenon comes with people who have children approaching college age. It’s tempting to put your children’s needs first by diverting money that would ordinarily go toward retirement savings and putting it instead in a 529 plan account or other educational savings vehicle. Yet even if doing so results in your children needing less financial aid — a conclusion that’s far from certain…Read More