Retirement Tips for 2017

Have a discovery phase

Call it an assessment, checkup or discovery, but a key part of planning for retirement is taking an overall look at what’s going on. See where your money is invested, check the performance and scrutinise your contributions. Online tools, such as a retirement calculator or retirement income calculator, can help you to see if you are on track to accumulate enough money to meet your expenses and the live you want to live in retirement.

Learn the rules

The rules of retirement financing are complicated, but you don’t have to be Einstein to learn them. Get the lowdown on a couple of specifics.

Retirement pension has different claiming strategies, and one notable loophole — “file-and-suspend” — is over. As you prepare for retirement, check your Social Security account to see how you might claim a bigger benefit by waiting until your full retirement age. At the very least, you should know that for every year past 62 you delay benefits, your monthly check increases.

If interest rates rise …

Good news about rising interest rates: You might finally see a bump in in the returns on your traditional savings or money market account. The process will be slow and gradual because institutions will be conservative in passing along any rate increases to consumers.

Have a cash cushion

Going into retirement 100 percent invested in the stock market is a bad idea.

Imagine you plan to retire on Sept. 30, and on Sept. 29 the market plummets. Or that there’s a big crash any time after you retire. Buffer against a bear market by having two years’ worth of liquid savings, so you can meet your expenses and not have to sell your investments at the worst possible time.

A few years before you plan to retire, redirect your contributions for retirement into cash investment options, such as money market funds or CDs, instead of mutual funds.

Stay diversified

Retirement savers often don’t know if they should put their salary deferrals into a 401(k) — a workplace account that combines the after-tax features.

Instead of choosing one or the other, hedge your bets by diversifying and keeping some of your retirement money tax-deferred and some in an account. When you mix things up across the different categories, you’ll have more flexibility when it comes time to pull the money out.

Fill in all account beneficiaries

Make sure you designate beneficiaries. Otherwise, your family members could wind up spending months in surrogate or probate court. “Why even go through that? The big benefit (to designations) is avoiding emotional trauma.

Set aside a few hours to go through your planning documents to see if your 401(k)s, life insurance and have clearly named beneficiaries. Make sure your wishes are explicit. An attorney’s letter is not enough.

Pay down debts

It’s easier to save for retirement when you don’t have student debt hanging over your head.

It’s not just younger workers who carry student debt. Though millennials are likeliest to have student loans, 26 percent of Generation X and 13 percent of baby boomers still have student loan obligations.

When you’re about to enter your retirement years, credit card debt — and any student debt — should be paid down.

If you work with an adviser, ask what the professional’s compensation model is: commission on investments sold, a flat fee or a percentage of assets. Investors should know how they’re being charged, and whether that’s the most cost effective for their situation.

Save more today

Financial experts now recommend saving as much as 15 percent of your salary for retirement. The way to get there? Increase the amount you save by a one or two percentage points at a time. Some workplace retirement plans have an auto-increase feature. If yours doesn’t, raise your contribution yourself on your birthday, after New Year’s or any other significant day. Set a reminder on your calendar. If you get a raise, boost your savings by that amount — or at least by a portion of that amount.

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