Getting Ready for Retirement in NJ
Tips for Retirement
Save as much as possible.
Cut extra expenses.
Maybe you go out for lunch every day or most days at work or stop to get coffee on the way into the office. These expenses add up quickly and cutting them out by bringing your lunch or making coffee at home can save a sizeable chunk of change over the long run. For example a coffee every day, even if you only buy a small regular coffee at a cost of $2.50 every weekday, can amount to almost $700 a year and not everyone is buying simply a small regular coffee. Purchasing a latte or other luxury coffees every day can add up to upwards of $1050 a year. Though this is not enough to retire on, that is a good amount to add to your IRA to collect interest, and that’s only coffee, think about the other areas where you may be able to cut expenses.
Put away lump sums.
Instead of buying something new you may not need with that tax return, put it into an IRA. If you have a monthly payment you will finish paying soon such as your credit card or a car payment, when it is paid off, keep putting that amount into your IRA or check to see if you can adjust the contributions on your 401(k) to apply that amount. These sums of money can quickly add to your retirement investment and best of all you will not feel the impact because it is either extra money or money that you have been used to living without.
You can also budget to send a certain amount each month directly from your paycheck to your IRA. This way that money is automatically set aside, resisting the temptation to be spent it elsewhere.
Consider working longer.
Retirement is not quite what it used to be, so if you are in good health to continue to work, you may decide to keep working longer than the typical retirement age of sixty-seven. These extra years will also provide more time to save and prepare for a better retirement when you decide to leave the workforce. New Jersey is a higher taxed state, so working a few extra years could be an effective way to prepare.
Pay off debt and try not to collect more debt.
If you have credit card debt or any loans hanging over your head that will come with you in retirement, think about creating a plan to get rid of those payments beforehand. Create a budget so you have a plan to pay off those debts in the timeline you set for yourself prior to retiring. Easier said than done, but with a budget plan in place you can work towards your goal and be more financially comfortable when it’s time for retirement. Life happens, if anything comes up that creates additional debt, see if you can restructure your budget to afford the added expense. You could cut out luxuries, or even restructure your finances, such as refinancing your property or getting a lower interest rate loan to give you the money to more easily afford the added expense.
Sell the large house.
If the kids are out of the house, you may not need the amount of square footage you needed when they were living at home. Houses come with a burden of maintenance such as yard work and interior and exterior upkeep that, as a homeowner, you bear the responsibility of handling and repairing. When nearing retirement or when the kids have left home, whichever may come first, downsizing is worth serious consideration. It will give you a more manageable living space that will be easier to maintain as you go into retirement. Downsizing could mean moving to a lesser square footage, more affordable home with a smaller yard, a condo, an apartment, or housing community that includes amenities and on-site benefits. Each of these options has its benefits. Most impactfully, the money you receive by selling your current residence can be put into your IRA for retirement, contributing a large amount to your retirement savings.
Get rid of things you don’t use or need.
We all have those items; crafting supplies, tools or knick-knacks that we think we will use or need one day, but that day often never comes. We forget about these items and possibly even buy another copy because the original is buried somewhere around the house we can’t locate, or we’ve simply forgotten we had it in the first place. Preparing for retirement is a great opportunity to go through the house and critically think about what you actually use, what you can give away to a better home or simply throw away. When your house is decluttered, it will be more accessible and you’ll be able to better find what you do use. If you are thinking about downsizing or know you will be moving, then decluttering is essential. When moving day comes, it won’t be as daunting since you have already gone through the process of getting rid of the extra things you don’t use.
Are you preparing for retirement? As you begin plans for retirement, consider The Vista, a Continuing Care Retirement Community. The Vista will offer a range of programs and amenities to engage, entertain, and inspire you.
For more information about The Vista, please contact us today.