Practical Retirement Tips For The Millennials – Secret Of A Debt Free Retired Life

tips for retirement planning

Retirement is the most pleasing part of someone’s life as this is the best time to enjoy life and do all those things which you couldn’t do due to your work pressure. Perhaps this is why this period is known as the golden years of someone’s life. However, nowadays due to lack of proper retirement planning by people, there are lot of people who are drowning in debt during their retired life. There are even people who are still paying down their student loan debt which they took out during their college life. If you don’t want to spoil your retired life, here are some retirement planning tips you should know about.

  1. Know about the retirement plan offered by employer: When you’re already working, inquire about the retirement plan offered by your employer. What kind of plan are they offering? Is it a 401(k) or a 403(b), defined benefit, profit sharing account or cash balance or some other kind? Make sure you’re taking full advantage of the 401(k) of the company as this is one of the best retirement plans that you can make use of. Ask for a contribution from the employer and even if he is not offering a match, keep contributing money.
  2. Consider a Roth IRA: Roth deferrals are nothing but contributions which are made to the plan on an after-tax basis. Roth contributions are usually made after the taxes have been deducted from your monthly and it will be distributed at retirement tax-free. You also get the advantage of withdrawing the money on your investments when you are 59 and half years old and you’re allowed to have a Roth account for at least 5 years.
  3. Make use of the free money: It is natural that anyone will be intrigued by something labelled “Free”. If your company offers a 401(k) match, you can take full advantage of the free money. The most common matching formula which is offered by the companies in the US is 50% match of 6% of your contributions. This means that if you contribute 6 dollars of every 100 dollars which you make, your company will offer you 3 dollars to the retirement plan.
Therefore, if you’re wondering about spending a peaceful and enjoyable golden years, make sure you follow the retirement planning tips mentioned above. Seek help of a financial advisor in case you’re not confident about your finances. Check out our other tips on retirement planning.

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