You may have read about the first three Retirement Blues points– match maximization, loan avoidance, and what could be defined as the “basket full of eggs” (refer to similar article on the blog, please, called “The Retirement Blues”). Well, there are three more to keep in mind. This stuff is so important that there simply had to be a second article written on them. No joke. Retirement planning is a big deal. So read on.
Remember the “basket full of eggs” (investment diversification). Keep in mind that you will need to rebalance your portfolio of stocks and bonds. This is the typical tactic when diversifying your investments. Because you never know what will happen with the stocks and bonds fluctuation, make sure to always review regularly just in case you need to adjust your investments based on the balance of your stocks and bonds. That maximizes your retirement income as best as possible.
Secondly, do NOT cash out the moment you leave your employer for good. What happens is your income that you pull out becomes fully taxable, releasing for some nearly half of the savings that were originally there! Do NOT do that. If you want to maximize your money, use what’s called an IRA (Individual Retirement Account) or simply transfer your savings into a new employer if you plan on getting another job before retiring. This ensures that when you DO retire, all the money you’ve saved is still there.
This is, by far, the most important point to learn: simply, take it one step at a time! Don’t get overwhelmed. Retirement planning is full of choices, sometimes too many, it seems. But just remember: you basically have a lifetime to figure it all out. Take your time. And when the time comes for you to take it easy, let it all ride, and the rewards will ride with you!