Top 5 Tips for Preparing for Retirement

financial planning

Retirement planning is something that many Americans tend to put off until their later years. In fact, a recent report from the U.S. Government Accountability Office showed that 48% of households aged 55 or older did not have any retirement savings. However, starting early will save you a lot of headaches down the road. Whether you’re in your 20s or just a few years away from retirement, there’s never a better time than now to start planning.

ARQ Wealth Advisors, experts in retirement planning and wealth management in Scottsdale, AZ, have put together a list of strategies to get you started. The following are a few steps that you can take early on, regardless of your financial status, to reach your financial goals:

1.   Start Early

We can’t stress this enough. It may seem too early to some, but to ensure that you put yourself and your family in the best position possible, you’ll need to start today. Don’t panic if you’ve been putting off income planning. Better late than never! A good first step is to educate yourself on retirement income options and to understand your projected costs. Set a realistic goal of when you would like to retire. Having a simple plan will help you stay on course. The easiest way to get started is to meet with a knowledgeable financial planner who will evaluate your needs and come up with a custom investment strategy. If you need retirement planning in Scottsdale, AZ, contact ARQ Wealth Advisors today.

2.   Know Where You Want to Retire and Plan Accordingly

Taxes differ tremendously between states. Knowing where you want to retire can help you account for these differences. For example, certain states with no income taxes may have high property taxes—something that would affect low-income retirees negatively. Some states may also tax retirement savings accounts as income or have other special taxes such as an estate tax. Scottsdale, AZ, is a popular destination for retirees. Retiring in this state has certain benefits and downfalls that are important to consider. If you are planning on retiring in the Scottsdale area, contact ARQ Wealth Management located in Scottsdale to learn more about the local tax laws and implications.

3.   Have a Budget

Do you know how much you spend each year? If not, this would be a good time to start tracking. Because retirement will be a time of limited income, it will be crucial to know your costs of living. This will also allow you to see any unnecessary costs that you can cut down on to save more money. Make sure to account for all your assets and liabilities and start paying off large debts. Know your means and live within them. Now is as good a time as any to start practicing. See if you can stay within your budget. That means paying off those credit card and student loan debts and not accumulating any more in their place. If you begin practicing this now, a debt-free retirement is possible! You should also focus on creating long-term investment strategies that will help you pay for those expenses. A financial planner will help you do all this work and show you the timeline for your retirement. ARQ Wealth Advisors is your trusted financial planner in Scottsdale and offers financial planning services and investment management.

4.   Make a Healthcare Plan

All Americans are eligible to enroll in Medicare at the age of 65. It is the most popular health insurance coverage for retirees due to its lower cost. Medicare coverage is federal and does not differ from state to state. However, it still comes with premiums and deductibles like other health insurance plans. These costs change based on your income level. There are also certain healthcare expenses, such as most dental work, that are not covered by this health insurance plan. A supplemental insurance plan may be necessary to pay for these items. Retirees need to have savings set aside to account for these expenses. If you qualify, opening a Health Savings Account (HSA) is a great way to start saving toward retirement health expenses. The money you put in an HSA is pre-tax. You can also use this money at any time, but if it’s not used, it will continue to grow tax-free. Your employer may even contribute to your account. However, there are some limitations to what the money can be spent on. Make note of these limitations to avoid any unnecessary surprises. It’s best to speak with a retirement-planning specialist such as an expert at ARQ Wealth to learn more about your unique situation and to provide you with a customized plan.

5.   Take Advantage of Tax-Free Retirement Savings Accounts

There are several different options for receiving retirement income. These options may differ based on your age, income, and employment. Familiarize yourself with the different savings accounts and figure out what works best for your lifestyle. Making yearly contributions to a 401(k) or a 403(b) account allows you to collect income after you retire. Many employers also offer plans to match employee contributions to 401(k) or 403(b) accounts. This is essentially free money that your employer is willing to invest in your retirement. If you have this opportunity, make sure to take advantage of it! Even without an employer match, putting money aside in one of these accounts will provide you with tax-free retirement income. There may be limits to the accounts available for you to open or different tax implications for using certain savings accounts. If you are a low- or middle-income individual, you may also be able to receive a tax credit for your contribution. Don’t hesitate to discuss your investment strategy with a financial planner before making a move. To learn more about the different retirement accounts available to you, contact your financial planner in Scottsdale: ARQ Wealth Advisors.

ARQ Wealth Advisors is home to your trusted retirement planning experts in Scottsdale. We offer financial planning and investment management services tailored to your needs. We understand that each of our clients has unique goals and challenges. No matter where you are in your financial planning journey, we can help. Our investment advisors will guide you through retirement planning and investment strategies so you can reach your financial goals. Call us today at 480-214-9572 or visit our website to schedule a consultation.

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The opinions expressed in this blog post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual. It is only intended to provide education about the financial industry. As always, please remember that investing involves risk of loss of principal and capital. ARQ Wealth Advisors, LLC is a registered investment adviser with the U.S. Securities and Exchange Commission. Advisory services are only offered to clients or prospective clients where ARQ Wealth Advisors, LLC and its representatives are properly licensed or exempt from licensure. No advice may be rendered by ARQ Wealth Advisors, LLC unless a client service agreement is in place. Likes and dislikes are not considered an endorsement for our firm.