Top Retirement Advice from the Experts
Retirement advice is a dime a dozen, but what do the experts recommend?
Updated on May 20 2020
Retirement advice is a dime a dozen, but what do the experts recommend? We take a look at the top expert retirement advice to see what you should (and shouldn’t!) be doing.
Check, check, and recheck your investment allocations
Top financial advisor and TV personality Suze Orman says that it’s of the utmost importance to make sure your portfolio is allocated properly for your retirement. “The biggest mistakes you will ever make in your financial life are the mistakes you don’t even know you are making.” Orman suggests looking into exchange-traded funds (ETF) that pay out dividends. These types of funds typically have stable, growing companies.
Never, ever leave money on the table
If your employer offers a 401(k) contribution match, Dave Ramsey says that you should always take it! It is recommended to put 15% of your income into retirement, which generally includes your employer matching (though Dave does say that he would prefer you put the 15% in yourself and then also get whatever your employer is matching).
Say that your employer offers up to a 4% match once you contribute 6% or more. Dave Ramsey, save for extreme consumer debt, recommends to ALWAYS take that match. However, since it’s recommended to invest 15%, you should contribute 11% in this scenario. With the power of compound interest, your retirement accounts will grow exponentially more than if you don’t contribute all that you can.
Remember, your expenses may increase in retirement
Top retirement expert Ric Edelman stresses that your expenses won’t go down in retirement—in fact, they most likely will go up! Bearing that in mind, it’s essential that you get a firm plan in place to account for those expenses. Before you retire, consider downsizing your home, make sure that all consumer debt is paid off, and create a budget that encompasses all discretionary and non-discretionary spending, like going out to eat, bills, and hobbies.
The best time to start retirement planning is when you enter the workforce, the next best time is today
Mark Miller is an expert retirement journalist who has written for Reuters and WealthManagement.com. Regarding his top retirement advice, he says:
“For young people, one thing is the importance of starting to save at the youngest age possible, even if it’s a small amount, because compounding is your friend. Young people also tend to be far too pessimistic about the future of Social Security.”
Compound interest is a huge aspect of a successful retirement, so it’s important to save as much as you can as soon as you enter the workforce. However, if you have put off retirement saving for whatever reason, the next best time to start saving is now. It is possible to have a long retirement even if you don’t start saving for it in your 20s, but it will take more contributions now to get there.
When it comes to retirement planning, we recommend speaking with a financial advisor. They can help you with your individual situation and come up with a plan that will lead you to a successful, happy retirement.
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