Nobody works forever. Whether you have a white-collar job, a blue-collar job, or own your own business, you will eventually have to cease working as you won’t be able to pull the same hours due to old age.
If you don’t have a retirement plan in place when this time arrives, you might find it challenging to live comfortably since you are no longer earning a steady salary to pay for your needs and other bills.
In this interview, finance expert Lance Ippolito has shared tips on how to set up your retirement plans for success alongside other tips you will need at that time.
How soon should individuals start working towards a retirement plan?
Lance Ippolito: Unfortunately, many people start thinking about retirement when they begin to approach retirement age, and by then, it is usually too late to make any significant changes. This is why the best time to start working towards a retirement plan is soon after you have landed a steady job.
What tips can you recommend to help individuals set up a successful retirement plan?
Lance Ippolito: I often tell folks to open an Individual Retirement Account (IRA). You would have to choose between a Roth and Traditional account for your IRA, depending on how you plan to pay taxes on the account.
Additionally, consider investing in landed property. By the time you are ready to retire, you will undoubtedly have earned a sizable ROI since land appreciates over time. Venturing into sustainable trading and investing in other financial products like equities, bonds, exchange-traded funds (ETFs), and mutual funds should also be included in your retirement plans.
Which of the aforementioned is the most important and why?
Lance: Setting up an IRA is the most important thing you need to do. All that’s required is to go to your bank, submit the necessary documentation to open the account then start making your contributions.
While there is no age restriction for starting your IRA or how many times you can fund it, the amount you can contribute may be limited depending on your gross income and tax filing status.
Is having a personal accountant critical to setting up your retirement plans?
Lance: Although you can do your own due diligence and other research to help create your retirement plan, it is best to seek the advice of a professional like an accountant or any other financial expert to avoid making any mistakes you might regret later on.
If you have enough money, you can continue to use their services to assist you in choosing investments that will increase the value of your retirement savings while not being exposed to the dangers associated with the financial markets.
What age would you consider the appropriate retirement age?
Lance: The average retirement age is typically noted to be 65 or 66. At this age, you can begin enjoying your Social Security retirement benefit, although you can have access to spending the fund in your IRA earlier than that.
However, to be more precise, there is no ideal or suitable retirement age. What suits you might not be appropriate for someone else. Ultimately, this decision will depend on your financial standing, physical well-being, and intuition.