5 Retirement Tips for 2019 -- and Beyond

Retirement can be a fulfilling period of life but also a stressful one if you haven't planned ahead. Regardless of when you're aiming to retire, here are five important tips to keep in mind.

1. Don't rely too much on Social Security

Many workers neglect their retirement savings and figure they'll fall back on Social Security instead. Doing so, however, could leave you severely cash strapped.

Social Security only pays the average recipient today $17,532 a year -- hardly enough money to live comfortably. Additionally, those benefits will only replace about 40% of your former income if you're an average earner, and most seniors need close to double that amount to live comfortably. Therefore, focus on ramping up your savings as much as you can during your career. The more money you enter retirement with, the less reliant you'll be on Social Security.

2. Prepare to pay taxes

Many seniors assume they'll get a break from paying taxes, but generally speaking, the things you're liable for paying taxes on during your working years remain taxable in retirement. For example, when you work at a job, you pay taxes on your income. When you live on retirement savings, you pay taxes on your IRA or 401(k) withdrawals unless your savings are housed in a Roth account. Similarly, gains from investments held in a nonretirement account are subject to taxes, and if you have money in the bank, you'll pay taxes on the interest income you collect.

The more you read up on the taxes you'll pay in retirement, the better you can prepare. For example, converting a traditional IRA to a Roth could help you retain more money in the future, as can loading up on investments that cut you a tax break, like municipal bonds.

3. Retire with company

There's a reason that retirees are 40% more likely to get depressed than workers: Having too much free time on your hands can lead to feelings of boredom and restlessness. It's therefore wise to retire at a time when you'll have some sort of social outlet, so if you're ready to call it quits on the job front but you don't know anyone else in that same boat, wait a few years until your friends, neighbors, or colleagues are ready to leave the workforce as well. Otherwise, you might end up lonely and disillusioned very quickly.

4. Leave the option to work on the table

No matter how well you save, money can end up growing tight in retirement. Your home might start to age and require repairs. You might rack up a host of medical bills that cost you more than anticipated. That's why planning to work in retirement in some capacity is a wise idea. You don't necessarily need to commit to a standing job but might instead set up a business or some sort of side hustle you can carry into your golden years. Not only will the option to generate income spare you some stress, but you might appreciate having something extra to do with your newfound free time.

5. Prepare to do it earlier than planned

Many people assume they'll get to retire when and how they choose, but a surprising 60% of workers wind up retiring sooner than planned, and the reasons run the gamut from health issues to job loss. While you might have a specific retirement age in mind, come up with a backup plan in case your permanent departure from the workforce happens earlier than you expect it to. For example, you might decide that you'll compensate by cutting some expenses or tapping your nest egg but leaving your Social Security benefits alone to grow. Either way, be prepared for that possibility and know how you'll handle it.

You deserve a retirement that's free of emotional and financial stress. A little planning in advance could be just the thing that allows you to enjoy your golden years to the fullest.

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