As you approach retirement, it’s important to have a solid plan in place to ensure a comfortable and financially stable future. Here are three retirement strategies that I often recommend to clients who are about to retire:
1. Delay Social Security Benefits: While you can start receiving Social Security benefits as early as age 62, delaying your benefits can significantly increase your monthly payments. For every year you delay beyond your full retirement age (between 66 and 67, depending on your birth year), your benefit will increase by about 8%. By waiting until age 70, you can increase your benefits by up to 32% compared to starting at age 66. If you can afford to wait, delaying your Social Security benefits can be a smart retirement strategy.
2. Create a Diversified Retirement Portfolio: Your retirement portfolio should be diversified to help minimize risk and maximize returns. This means investing in a variety of assets, such as stocks, bonds, and mutual funds. You should also consider your risk tolerance, age, and retirement goals when creating your portfolio. It’s important to regularly review and adjust your portfolio as needed to ensure it remains in line with your goals and risk tolerance.
3. Consider a Roth Conversion: If you have a traditional IRA or 401(k), you may want to consider converting some or all of your funds to a Roth IRA. While you’ll pay taxes on the amount you convert, the money will grow tax-free and you won’t have to pay taxes when you withdraw it in retirement. This can be especially beneficial if you expect your tax rate to be higher in retirement than it is now.
Overall, it’s important to work with a financial advisor to create a retirement plan that meets your unique needs and goals. By following these strategies and making smart financial decisions, you can help ensure a comfortable and financially secure retirement.
