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Matthew Tuttle

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Top 5 Things to Do

Whether you are 21 or 51, it’s never too late to begin planning for your retirement. It’s about investing wisely and having that money compound more than a regular savings account would allow. Here are five things to do to start your retirement plan.

1. Define your retirement goals.

You need a compelling vision of the future to ensure success. Sit down and really think about what you want your retired life to look like and put your vision in writing. Don’t just type it, put pen to paper and really bring your thoughts to life. Do you see yourself lying on the beach? Traveling around the world? Or hanging out in a huge backyard with all your grandkids? Anticipate the costs associated with the life you want. By mapping out exactly what you’re saving for, you’ll have a greater desire to see that money grow.

2. Look at all your options.

With so many banks, financial analysts and an entire internet full of financial advice out there, it’s important to look into all of the investment opportunities available to you. Consult a financial advisor and ask for a free consultation to get the ball rolling. If you are investing in stocks, read about the companies and find out what investors are saying about them. If it’s bonds, talk about what are the best long-term options out there. Don’t rush into anything.

3. Start a savings plan.

It’s important to set a realistic retirement saving plan and make sure you are on your way to your goal. The web site for the Employee Benefit Research Institute, Choosetosave.org, has a great tool called the “Ballpark Estimate” to help you determine how much you should save reach your retirement goals. By realistically estimating expenses, you’ll have a clearer picture of the future and be happier when you achieve attainable goals.

4. Utilize company plans.

Many companies offer a retirement fund called a 401(k) savings plan, and it is a much better option than other mutual funds or investment opportunities. For one, the money is taken directly from your paycheck tax-free. Many companies also match employee contributions, doubling your savings. There are similar plans available for workers in different industries, including the 403(b), offered by nonprofit organizations and the 457(b), which is exclusive to government employees.

5. Remember your health.

When people plan for retirement, one of the areas that they often forget is long-term health care. Ordinary health insurance does not cover care for you in a nursing home. The cost of long-term care can wipe out your savings if don’t have the correct insurance—and Medicare and Medicaid may not fully cover you. The wisest thing to do is to shop around and compare policies to find the right one for you. Long-term health-care insurance can be less expensive if you buy a policy at middle age, and it will help you and your family make the most of your later years.

Posted: 1/17/08