Pre-Retirement Planning

With people living longer and longer, it is not uncommon to spend as much as 1/3 of your life in retirement. Because of this, saving and planning for retirement years has become even more critical. The reason is that the earlier you start saving for retirement, the more you'll have for your retirement years.

While saving earlier is ideal, in reality the further you are from retirement the more difficult it is to make savings a budgeting priority. However, by waiting longer you'll be obligated to save an even larger percentage of your earnings - something that might not be possible - as you will not have taken full advantage of compounding.

The following are different options you have that may help you start saving earlier, and/or save more:

Save in an IRA
The government has made available the ideal savings instrument, where savings are tax-deferred and can compound more quickly than comparable taxable accounts. If possible, catch up and/or max out your IRA (or 401(k))

Make your asset mix match you
Try and avoid two common retirement savings mistakes - being overly cautious, or taking excessive risks when deciding how much of your assets to invest in cash, stocks or bonds.