3 Ways to Be Smart About Planning for Your Retirement

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If you are of working age, then you should be planning for your retirement. You should start planning for retirement as soon as you start bringing in a paycheck. When it comes to planning for your retirement, you can take steps that will help you be smart about the planning process.

Plan for an Early Retirement

First, you are going to want to plan to retire early. It is smart to plan to retire early, not because you are pushing for early retirement, but because the truth is that a vast majority of retirees end up having to retire before their target retirement age. This is due to various factors, such as disability, layoffs, and changing work environments. That is why it is smart to have a target retirement age and have a plan in place if you are forced to retire early.

Have a Plan for Your Debt

Second, it is important to have a plan for your debt. You don't want to go into your retirement with a bunch of debt, so that means you will need to tackle your debt now. You will want to sit down and figure out what debt you have and how much debt you are carrying.

You will want to create a plan for paying off that debt and choose a debt repayment method that works for you. You don't need to put all your money into paying off your debt; however, you need to have a plan that will allow you to pay off your debt in a reasonable amount of time.

Use Your Health Savings Account (HSA)

If you have a high-deductible health insurance plan, you can take advantage of a Health Savings Account (HSA). With a health savings account, you can add a set amount of money each year to the account. You can use that money to pay for health expenses; however, you are not required to use the money. You can add the money pre-tax and invest the money.

The money grows tax-deferred year to year until you withdraw it for medical expenses or withdraw it when you retire. It is a smart vehicle to ensure you are not saddled with medical debt and can also turn into a nice extra little nest egg during your retirement.

Retirement planning is a process; it is not a single action. You need to plan to retire early, even if you have a target retirement age, as you never know when you may be forced out of the workforce. You need to have a plan for paying off your debt, and you need to use smart strategies to save for your retirement, such as a Health Savings Account.

Talk to a financial planning company, like Compass Financial Group to plan for your retirement.