Retirement Planning is a Game of Chess

Keep Retirement Strategy in Mind This Holiday Season

With the holidays rapidly approaching, a goal often set during these times is to diversify your retirement funds. With retirement investment there are two main focuses: investing/saving and distribution. During retirement you are at your most vulnerable financially because a regular paycheck is not coming in. It is the longest self-imposed period of unemployment most folks face. The following is fantastic advice for when you are trying to invest.

Your retirement planned around living and may seem expensive to support. Remember, roughly 55% of folk live beyond their life expectancy. So, it is important to plan for the long haul. A long-term investment sustains a better savings, but there are risks being found there. Short-term investments usually have higher yields. It is important to balance these.

Spending now can save more money for the long road. An example of this is withdrawing properly to avoid provisional income.

Be reasonable when it comes to expectations. Historical returns may not be what your portfolio does. Returns typically fall below the average. However, this can be balance with a diversification of accounts. Though we have historically low interest rates, this means bond returns will not impact retirement much. This will affect those who have retired most.

Heedless of where you are at in retirement planning, relying solely on plans that require higher returns is dangerous. If you expect to make more in the future, that means spending much more upfront. Stocks carry a higher risk than bonds, so they will yield higher return rates. Simply put: Spending more today and expecting higher returns in the future is risky business. The risks and consequences must be evaluated on a case-by-case basis.

Strategy should always be a top priority. Diversifying your retirement portfolio is just a start. Considering all the risks you will face in retirement is the next stop. Putting all your funds in one bucket will expose you to much more risk—taxable, tax-deferred, and tax-free. Integrate different approaches and accounts to combat inflation, tax rates, rate of return, and even long-term care.

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Crafty holidays savings to think about when retirement planning

Crafty Savings as You Plan for Retirement this Holiday Season

As retirement approaches, learning ways to spend less during the holidays is helpful! Shifting focus to doing so before retirement can also prepare you for when you’re living in the longest, self-imposed period of unemployment—heedless of what your retirement portfolio may look like!

Rethinking budget is a great first step. If you already have holiday decorations, don’t buy more; especially if they’re still in mint condition. This way it is one less expense on the holiday budget. Decide how much you want to spend on gifts overall and allocate so much to food. Remembering, be strict about your budget limits. If you can spend even less, do it!

For gifts, decide for who and how much per person. If you are able, shop in-stores versus online. This will save you shipping costs. If you want to gift a lot of people, consider doing smaller gifts for everyone. If there are couples on your holiday gift list, provide them with a gift card for a date night. The best gifts are also gifts homemade. Mass bake cookies or bread and give those out! You could always get crafty if you are able and make ornaments or simple photos collages. Lastly, another great idea would be the gift experiences. Much like giving a couple a gift card for a night out, take the grandkids together for a fun day to a public place such as a trampoline activity center or take your kids out of dinner once the holiday season calms down.

Meals, small or big, should be evaluated. If you are typically the one to hold a large family dinner in your home, see if family members can split making sides and desserts. Do a potluck. If you have done bigger family holiday dinners and are not feeling up to it, be honest with you family. Tell them you wish to not host the holiday this year or limit how many people you have over. This way the cost is either split up or at least reduced.

Take advantage of gift bundles and sales. A lot of places do gift bundles for things such as sample sizes for lotions or mini candle sets. Look into places that do gift card/certificate deals. Some food chain restaurants will give a packet of coupons if $50, for example, is spent on gift cards. Sometimes places will event gift “free” gift card money for a set amount on gift cards—buy $25, get $5 included.

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