8 Money Experts Reveal Their First Retirement Advice


Planning a comfortable retirement doesn’t have to be difficult, but it does take intention. GOBankingRates interviewed eight financial experts to get their top retirement and investment advice. Here’s what they recommend.

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1. Get out of debt

As the Federal Reserve raises interest rates, debt becomes even more expensive, warned Jay Zigmont, CFP and founder of Childfree Wealth.

“Make it your goal to get rid of all your consumer debt first — everything but your house,” he said. “So try to pay off your house before you retire. When your debt is paid off, you effectively get a risk-free return on the interest you would have paid and you will then have more money to invest.

2. Have a retirement income goal

To save enough for retirement, try to figure out how much you plan to spend. Many people fail to figure out how much net income they’ll need to pay their bills and support their desired lifestyle in retirement, said Devin Carroll, owner and principal advisor of Carroll Advisory Group.

“If someone has saved $1 million but finds out in retirement that they need $12,000 a month, they’ll be in for a nasty surprise,” he said.

3. Set up a savings and investment plan

A formal retirement plan should include an investment strategy and consider future and current taxes, your retirement age and Social Security income, said David Rosenstrock, director of Wharton Wealth Planning.

“Those who follow a specific financial plan can expect to have better average returns and long-term success in retirement than those who don’t,” he said.

You should also update this plan regularly as the market changes and your circumstances change.

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4. Find a lifelong source of income

Saving for retirement is a step in the right direction, but it’s a good idea to supplement it with a source of income that will remain constant in retirement, said Yanelys Benham, wealth management advisor at TIAA. Otherwise, you could burn through your savings if retirement lasts longer than expected.

“There are three sources of income,” she said. “One is social security, but that’s often not enough on its own. Pensions are another, but these are becoming increasingly rare. The third is annuities, which a growing number of workplace pension plans include as an investment option. Talk to your employer or a financial advisor to learn more about your options and which ones would be best for you.

5. Save for health care

Focusing solely on tax-sheltered accounts like Roth IRAs or 401(k) plans can lead people to ignore rapidly rising health care costs, said Ari Parker, a lawyer trained at Stanford and co-founder of Chapter, a Medicare advisory organization.

“According to a Fidelity report, a 65-year-old couple should have at least $315,000 saved for health care costs alone,” he said. “People who don’t plan ahead often risk being hit with an unexpected medical bill.”

To help alleviate medical expenses, consider contributing to a health savings account, which allows you to pay for healthcare costs in retirement tax-free.

6. Save more to invest in yourself

On top of whatever you contribute to your retirement accounts, set aside an additional 10% of your income in a separate bank account, said Matthew Grishman, senior wealth adviser at Gebhardt Group.

“I recommend that this account be for helping people invest in themselves, to become the best possible version of themselves,” he said. “Whether it’s taking a course, learning a new trade, traveling halfway around the world to learn how to cook a new regional cuisine – something that deepens who you are and what you’re capable of. to become.”

7. Make annual financial planning projections

As you approach retirement, you will need to reassess your financial plan more regularly.

The first tip from CFP and Family Financial CEO Tammy Trenta is to do five-year annual financial planning projections leading up to retirement to determine how much you need to withdraw from your investments.

“Then make sure you have five years of that withdrawal amount in bonds and a six-month emergency cash fund,” she said. “This will allow your investments to withstand market volatility and prevent you from having to dip into stocks when they are down.”

8. Set yourself 3 goals for your first year of retirement

Goal setting can give young retirees a healthy direction, said Herman “Tommy” Thompson Jr., certified financial planner at Innovative Financial Group.

“I don’t care if it’s painting the house, seeing the grandkids every week, flying to the Philippines or playing 100 rounds of golf – set goals and achieve them” , did he declare. “Achievement gives our brains a rush of endorphins and helps us maintain healthy behaviors.”

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This article originally appeared on GOBankingRates.com: 8 Money Experts Reveal Their First Retirement Advice

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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