With rising healthcare costs, the possibility of Social Security insolvency and longer life expectancy, preparing for retirement in California is more important than ever before. Here are a few tips to help you jumpstart the retirement-saving process in 2023.
Ensure your goals are realistic
An essential part of retirement planning is setting goals and objectives that are clear and realistic. They should allow you to enjoy your retirement years and align with your lifestyle. Not saving enough and being over-restrictive lead to failure.
Scrutinize your taxes
Retirement planning involves tax preparation and scrutinization. If you can minimize taxes, you can hold onto more money during retirement. One way you may be able to do this is by managing withdrawals from retirement accounts that are tax-advantaged. Strategic timing may help you avoid triggering penalties. Additionally, consider the impact other income will have on your retirement.
Healthcare will cost more
An unfortunate part of the aging process is the need for more healthcare. And it is expected that healthcare costs will continue to rise. However, planning and carefully considering your healthcare options allows you to manage increased costs.
Choose retirement accounts carefully
Another essential part of your estate planning should be carefully selecting retirement accounts. Each account, like IRAs, 401(k)s and Roth IRAs, has pros and cons. You should understand their benefits and limitations to ensure they align with your financial situation and goals. For example, you may benefit from having your employer match your retirement contributions if you have a 401(k) to help your savings grow quicker.
Try to keep things as simple as possible regarding retirement savings. The earlier you get started, the better. And saving something is always better than saving nothing.