5 Steps to Plan for Retirement

Reaching your retirement savings goal is a milestone that will probably take many years to achieve. But the decisions you make don’t have to be complicated. There are only two aspects to retirement planning you need to understand: building up your retirement assets and making use of those assets once you retire. 

5 Easy Steps for Growing Toward Retirement:
Step 1

Make saving a habit

Time is your ally when saving for retirement. Small amounts invested regularly can build up large balances over decades. Automatic contributions to your retirement accounts make saving easy so you don’t have to worry about fitting it into your budget every month.

Step 2

Select the right kind of account

Accounts designed for retirement help you by reducing the impact of taxes as you save. If you’re already contributing regularly to your employer-sponsored retirement plan, that’s great. A retirement account like a  Traditional or Roth IRA  is a good tool to supplement your savings. It’s also possible to save for retirement in individual or joint taxable accounts. Those options can be beneficial for some people but not everyone, so you should discuss the option with a tax or financial advisor.

Step 3

Set a schedule

Depending on your retirement account, you might be required to take distributions after a certain age. Or, you might just want a monthly check you can depend on. Homestead can help you  set a distribution schedule  to make it easy to get the income you want.

Step 4

Consider your account rules

Many people end up with a mix of different account types in retirement. It’s usually smart to take income from accounts that have required minimum distributions first. For other accounts, you’ll need to know whether and how distributions will be taxed. In some situations, retirement accounts can be ideal gifts to family members. Ask us questions or talk with a financial planner or tax professional.

Step 5

Choose your funds

It’s all about timing. When retirement is many decades away, you will probably want to invest a good chunk of your savings in a combination of stock funds. Equities carry higher risk, but historically they have delivered higher long-term returns. As time goes on, you’ll probably want to shift assets to funds with lower levels of volatility. Homestead offers funds across all of these categories.

After years of hard work, giving to others can be an extremely rewarding outcome. We’ve got the tools to help you include your giving goals into your financial plan. 

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