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Small business owners have many options when it comes to setting up a retirement plan for their business and employees.  Previously, I had mentioned the SEP IRA as one of the more common choices.  Another option is the the SIMPLE IRA.   But don’t let the name fool you.   When it comes to the rules of the SIMPLE IRA, I actually think it’s one of the most confusing when compared to the rest of the retirement plan options.

SIMPLE IRA stands for Savings Investment Match Plan for Employees.  Often times I’ll refer to it as the “mini-401k” as it’s traditional used for employers with less than a 100 employees.  In addition to that, the administrative cost of a SIMPLE IRA for your employer is considerably much less than what a 401(k) would be.

If you are a business owner, here are some consideration if your interested in opening a Simple IRA for you and your employees.

What You Give to Your Employees is Theirs-Immediately

In 401k plans, you are allowed to put a vesting schedule that requires the employee to work there for a certain number of years before they can take the money if they quit or get fired.   This is not the case with the Simple IRA.  The day that you make a contribution to your employee’s account, the money is immediately theirs.  If they want to cash it out, then they can; although they have to pay a pretty stiff penalty.

Employers Have To Match in a SIMPLE IRA

Each year, the you are required to  make a contribution to your SIMPLE IRA account whether it be in the form of a match or what’s called a non-elected contribution.  Matching contribution states that the employer has to match at least what you match.  So, if you’re matching 3%, the employer has to match 3% as well.  Note that 3% is the most that the employer has to match, which could be considerably different than compared to a 401(k) or SEP IRA.

You do have the option to reduce the matching amount to 1% for two of a five year period.  That means if you do decide to do this,  that you have to match the full 3% for the remaining three of those five years. This aspect makes the Simple IRA a little tricky and not quite that “simple”.

If you don’t want to worry about the match, then you can elect to do a non-elective contribution.  This means that you will have to contribute 2% of your employee’s salary no matter what.

Remember, what you match is based on the employee’s salary, not yours or the businesses.   Business owners often times get this confused.

The Employees Control the Investments

With most 401(k)s, you are limited to the investment options of the 401k provider.  This is considerably different when compared to the SIMPLE IRA.  Being a self employed retirement plan, the SIMPLE IRA gives you the discretion of what exactly you want your money  invested into.  If you want to buy 100 shares of XYZ stock, then you have the capability and freedom to do so.  (Note: you are allowed to do this in a SEP IRA, too)

Employees Can Defer, Too.

Employees, if they choose, can defer up to $11,500 per year into the Simple IRA.  You are currently allowed to contribute up to $11,500 per year in a SIMPLE IRA.  If  they are over the age of 50, then they are allowed a catch-up contribution, which is $2,500.  These are the same contribution limits as the business owner, as well.  Please note that the $11,500 is far less than the $16,500 that you are eligible to contribute to a 401k.

No Borrowing Allowed

Simple IRA’s do not allow you to borrow as a 401k plan may.  If they have to get money, they’ll have to pay tax and penalty, which is higher than most plans-see below.

The SIMPLE IRA Two-year Rule.

This is something that should be definitely noted within the SIMPLE IRA.  Most retirement plans — 401(k)s, regular IRAs, or Roth IRAs, etc. — have the 10% early withdrawal penalty if under the age of 59.5.  But with the SIMPLE IRA, it takes it one step further.  If the SIMPLE IRA that you’ve started is less than two years and you cash that out, instead of the normal 10% penalty, you will be subject to a 25% penalty in addition to ordinary income tax.  That is a huge item to not be overlooked.  Keeping in mind as well too that doesn’t apply to just cashing it out.  If you were attempting to roll over your SIMPLE IRA into a rollover IRA, the 25% penalty would apply as well.  The key point is just to wait the two years before converting into either a regular IRA or cashing it out.

Source: goodfinancialcents.com

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Early retirement is the dream of many.

The idea of paying your dues, saving up, investing smart and retiring at some point before the “traditional” retirement age of 65 has a strong pull.

For many, early retirement is something that might even happen in their 40s.

If you are considering how you can retire early, here are 3 ideas that can help you reach an early retirement goal:

1. Disciplined Saving and Investing

One way you can build up a sizable nest egg is to practice disciplined investing. Consider how much you will need in your investment portfolio to create an income stream that you can live off of.

You will have to consider your age, how long you are likely to live, and the asset allocation you will need to provide reasonable growth, but not leave you over-exposed to the vagaries of the market. A long-term approach can help you.

If you are 30, and plan to retire by age 50 or 55, you might be able to amass $522,063.08 if you start with $10,000 and invest $1,000 a month for 20 years, assuming a 6.5% return — compounded quarterly — on your portfolio. (Note, though, that returns will vary according to market conditions, and there is always the risk of loss.) You can end up with more than $1 million if you double that to $2,000.

When you start living off your retirement portfolio, though, you will need to make sure you are not withdrawing so much that your nest egg can’t support you. You can maximize your efforts by investing in tax advantaged accounts and making use of your employer’s company match program. But you need a plan, and you need to be disciplined enough to stick with it if you go this route.

2. Cultivate Multiple Income Streams

Another idea for early retirement planning is to begin cultivating multiple income streams, rather than relying solely on your ability to build up a massive nest egg to get you to retirement. Instead, make a plan to pay down your debt (including your mortgage) by your early retirement target date.

Try to rid yourself of as many obligations as possible, so that you will have fewer expenses during retirement. Make a plan to pay down this debt while preparing for the future. Figure out how much money you will need each month to support your retirement lifestyle and then begin cultivating different income streams to create that income.

While there are rules that allow you to begin withdrawing from an IRA early, you likely won’t have access to Social Security benefits during an early retirement. You can consider your early withdrawal from an IRA if you must, but consider other sources of revenue. You can establish a web site that helps you earn residual income, write a book that results in royalties, start a business that can provide an income stream, or even engage in income investing.

It is, of course, possible to cultivate a number of income streams at once, diversifying your income sources. Start now to develop these streams so that they are established and mostly automatic by the time you are ready for early retirement.

3. Take Mini-Retirements

Tim Ferriss, author of The 4-Hour Workweek, made the idea of a mini-retirement somewhat popular. If you want to enjoy life now, and aren’t concerned about having a huge chunk of time to try and kill when you are older, you can plan to take mini-retirements, living in a different place for one to six months. You do have to be willing to quit a job — and try to find a new one — in some cases.

An alternative that appeals to me is having a job you can do from anywhere. I work from home as a freelance writer and I could actually whittle my workload down to a couple hours a day for a few months, and take my job on the road. I’d be living in a state of almost retirement, and it would work as long as I had access to the Internet. Consultants and other freelancers, as well as online entrepreneurs, could make this work. After all, if you can manage to work on reduced hours, and have time to do what you want, you won’t need the same size of large nest egg.

Bottom line: There are even more paths to early retirement, and it might be that you combine different efforts to come up with a method that works well for you. The important thing is to decide what you want to do, and then make a realistic plan to accomplish it.

Source: goodfinancialcents.com

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Hello! Today, I have a great article from JT. JT has a great story about how he was down to his last dollars living in a hostel, to hitting his retirement number just a little over a decade later. If you’re looking for another great retirement article, I also recommend How This 28 Year Old Retired With $2.25 Million. Below is his article on how to retire in your 30s. Enjoy!

Have you ever seen a grown man ugly cry?  Our faces scrunch up like a squeezed sponge, wringing the water from our eyes.  Our shoulders shake uncontrollably.  We gurgle out a noise that’s a cross between a laughing hyena and a grunt.  We’re not pretty.

It was 2000.  I was ugly crying on the bed of the Spanish Harlem hostel where I was living, down to my last dollars.  Months earlier, I graduated college, sold my car, and drove from Los Angeles to New York City with sunny West Coast optimism.  Then after months of getting rejected from job after job after job, reality blew in like an East Coast blizzard.

They say, “New York City:  If you can make it here, you can make it anywhere.”  For those of us who have tried, it can feel more like, “Since I can’t make it here, I can’t make it anywhere.”

I wasn’t crying because I failed.  I was ugly crying because I thought I was a failure.

And yet, a little over a decade later, I hit my retirement number.  So what happened between the tears of sadness and the tears of joy?  I’ll tell you exactly what I did to hit my retirement number in my 30s.

Related articles on how to retire in your 30s:

What is Your “Retirement Number?”

First, let me define what I mean by retirement number. It’s not just sitting under an umbrella on a faraway beach sipping fruity cocktails (although that would be nice!).  It’s simply the point where if you were to quit working, you could still cover your basic needs.  Basically?  It’s when going to work is a choice.

You might find out, like I did, that you actually want to keep working.  The best part of reaching your retirement number isn’t money, it’s agency. It’s the ability to spend your time the way you choose — unless you have little ones like I do waking you up at 6:00am every morning!

Sound pretty good?  Here are my 6 steps to find out your retirement number and how to reach it.  I’ll spend more time on the first 2 because they are the foundation for the remaining 4 steps.  The math might seem a little intimidating at first, but if you write it down on paper, you’ll find that it’s not too bad.  As you’ll see, you don’t have to be a math or money genius to retire early!

The 6 Steps to Retire in Your 30s:

Budget to a Balance Sheet:

When many of us think about our finances, we focus on what’s called the “income statement.”  As a result, the budgets you see are most often just an income statement, like this:

Understanding your savings amount is a good starting point, but it’s where most people stop.  Instead, use it as a starting point.  The savings amount from your income statement is there to help make your “balance sheet,” which is just a fancy way of understanding what you have and what you owe.  It will take some time go gather up your statements, but it’s not harder to make than your income statement. 

Your balance sheet is basically:

Your savings amount flows into your “What You Have” bucket since that savings is now what’s called an “asset.”  Think of it like when you eat cashews and have several left in your bowl.  You’d go and put the remaining cashews back into the bulk container.  Those cashews just went from leftovers to future snack.

Next, add your investment account balances to your “What You Have” bucket.  Don’t include your car, house, jewelry, or any other physical things unless you actually plan to sell them within a year.  You’re trying to figure out all your “What You Haves” that can be used to fund your living expenses, and last I checked, biting into your steering wheel wasn’t all that filling.

“What You Owe” is your credit cards, student loans, mortgage, and that loan you took out from your uncle.  The technical term for these is “liabilities.”  So, once you organize your information, you basically have your balance sheet.  You’ll see in the next steps why having a good grasp of both your income statement and your balance sheet is so important.

Know Your Retirement Math:

A study by financial planner William Bengen found that if you withdraw 4% a year, your money would last you at least 30 years if you had a 50/50 portfolio of stocks and bonds.  Others have found that most of the time (although on a 60/40 stock/bond portfolio), you would actually end up with more than when you started.

Bengen got to this 4% rate by back testing the withdrawal rate that would have worked even through the Great Depression, basically taking the worst case scenario in history.

The 4% withdrawal rate is a helpful guide for knowing how much to withdraw, but not very helpful to let you know how much you should have to withdraw from.  To find that, you’ll need to convert it into a goal.  We’ll start with the 4% withdrawal equation:

But that’s not a goal.  It’s basically where you are today if you were to try to retire early.  To convert it into a goal, you’ll need to do some mathematical jujitsu with the equation above (not to worry, I did it for you!).  It’s the same equation, but I’ve mixed it in a blender to make it more helpful:   

If you look carefully, I just reversed the “retirement withdrawal” equation.  I changed the “retirement withdrawal” to “living expenses” and inverted the 4% to make it 25.  By doing this, you can get to your “Retirement Number” goal. 

You might be thinking 25 times your expenses is a big, scary number.  It can seem unreachable.  But, I’m excited to show you how it can work in your favor.  To do that, turn the “25 times” into the ratio:

When you look at it as a ratio, you can see the power of reducing your expenses.  For every $1 you shave off of annual expenses, you’ll need $25 less in your “What You Have” bucket to hit your retirement number.  To illustrate how powerful this is, let’s look at an example:  Say you spend $35,000 a year but shaved off $4,000 in expenses.  Take a look at what happens:

If you put your money into the stock market, you might get the historical 7% annual returns.  Your account might get bigger.  But it also might get smaller.  But if you cut expenses, you’re guaranteed to get a 2,500% return!  ($4,000 savings x 2,500% = $100,000 effect on your retirement number)

Isn’t math fun?

You’ll notice I’ve only focused on “What You Have,” so why did I want you to know your entire balance sheet?  It’s a little circular, but I think you’ll get it one you think about how the income statement and balance sheet talk to each other:

Reducing your expensive “What You Owe” (like credit cards) items on your balance sheet leads to…

Lower expenses on your income statement, which leads to…

Higher savings on your income statement, which leads to…

Increasing your “What You Have” on your balance sheet, which leads to…

Hitting your retirement number sooner!

So don’t ignore your “What You Owe” number.  The sooner you get rid of your high interest rate ones like credit cards, the sooner you can hit your goal.

Alright, so how are we going to apply this to our actual lives?

(Do you wish you knew how to do this when you were younger?  Would you like to teach it to your child?  I’ll show you how teaching your children about money can be fun, fast, and easy starting here.  Download the FREE Guide to Helping Your Child Start Their First Business and you’ll also get access to a FREE course on how to get your finances in shape for early retirement!)

Make As Much As You Can:

I know — you’re shocked!

Even though it’s basic, let’s take a moment and think through the implications of what this means.  It means that if you’re serious about retiring early, you don’t work for passion.  You work for money.  If Goldman Sachs is offering you a job but you’d really rather be glassblowing, take the Goldman job, hang in for as long as you can, then retire early and spend the rest of your life glassblowing.  Till the ground now so that you can enjoy the fruit of your harvest later.

As for me, I persisted and eventually found myself at a hedge fund that allowed me to stay in New York City.  But most of us don’t have the opportunity to immediately get a six figure job.  What then? 

Side hustle.

Michelle has 65 Ways to Earn Extra Money.  There should be at least one that tickles your fancy.  Remember, you are trying to increase your income so you can increase your savings so you can increase your “What You Have.” 

So that I could extend my runway until I could get a full-time job, I worked as a sales associate at Banana Republic.  When I finally did land a full-time job, much to my friends’ puzzlement, I kept my sales associate job and turned it into a side hustle.  (Imagine how mortified my boss at the financial firm where I worked felt when she ran into me at Banana Republic!).  My balance sheet thanked me, as it helped me quickly pay off my “What You Owe” items, including student debt.

Change Your Spending Mindset:

Change your default question from “What can I afford?” to “What can I withstand?”  Often times, when we get an upgrade in pay, we too often automatically think we need an upgrade in lifestyle.  Why default to this assumption?

Let’s say you just got a promotion that is paying you $5,000 more a year.  You’re tired of asking your roommate clean up her dishes.  Your car is fine, but basic.  You think about how hard you’ve been working and how you deserve your own place and a new car. 

We’ve all felt this tug to spend more.  But as we’ve seen in step 2, the ability to minimize your spending is the most powerful thing you can do to reach your retirement number. 

Even though I was making six figures, I lived with roommates in non-prime areas of Manhattan until I got married.  I never had a doorman.  I hardly took cabs.  I stayed in and cooked most nights.  Within a few years, I paid off $15,000 of school debt and started building up my net worth.

Invest (Almost) Everything:

Saving is not the same as investing.  Saving is the act of putting money away for a rainy day.  Investing is putting money to work.  In fact, if you simply save without investing, you actually lose money due to inflation.

After you’ve saved enough for 3 to 6 months of living expenses, invest the rest.  The S&P 500 has historically returned 7% a year, after inflation.  Meanwhile, the average annual salary raise has been around 3%.  This difference is huge!  It means that at a certain point, your investments will actually start making more than what you’re saving per year.  Then, with enough time, it will actually start making more than your entire annual salary!

Basically, you’re trying to shift your finances from the picture on the left to the picture on the right.

Now, the last step can be tricky, but greases the path to your goal.

Move to a Lower Cost Area:

This is the trickiest part but also has the most potential to get you to your early retirement goal. An easier way to do this is finding an employer that also has a location where you want to be. For the East Coast, that’s either moving from Manhattan to a borough like Queens or transferring to another city like Philadelphia or Stamford.  On the West Coast, it’s like moving from San Francisco to Portland.  (Or, for the ultimate move, live in an RV and see the entire country like Michelle!)

A few years ago, I moved to Philadelphia while keeping my New York City salary.  In so doing, I significantly reduced my housing expense by thousands of dollars…every month. With that one move, because I reduced my biggest expense, my wife was able to stay at home with our 3 children.  In other words, it allowed my wife to retire (although her work as a SAHM is much more challenging than mine!).  At the same time, I was still able to accelerate our retirement timeline by decades!

So, if reducing your expenses is the most powerful thing you can do to reach your retirement number, cutting your housing expense is the most powerful thing you can do to reach your expense reduction goal.

But Can You Really Hit Your Retirement Number Before 40? 

Let’s put all six steps together. 

You’ll see that it can be done without making six figures.  Let’s say you make $50,000 out of college and have a side hustle that makes you an extra $12,000 a year (I based this on the 20-25 hours a week I worked at Banana Republic while keeping my full-time job).  Also, you live with a roommate and pack lunches most days a week and only occasionally eat out for dinner.

  • Your salary and expenses each increase 3% a year, which is in line with historical inflation.
  • Your investments earn 7%, which is the historical S&P 500 return above inflation.
  • At ages 28 and 34 you get a promotion, getting a $5,000 bump in salary each time.
  • Your first promotion at 28 gave you more responsibilities, so you decided to quit your side hustle.

At age 34, you move to a lower cost part of town, reducing your living expenses by 15% over the prior year (yes, it’s possible – I saved more than this moving from Manhattan to Philadelphia).

As you can see, by the time you’re 39, you could withdraw almost $43,000 a year.  So, if you were this person and quit your job at 39, you’d have enough to cover living expenses and taxes until social security kicks in. 

As you can see, it’s possible even if you don’t have a big salary.  So the real question is not “can you?” but “do you?”  Do you have the desire to transfer the math into your actual lifestyle?  Do you put in the effort to create the habits to sustain this level of investing for almost 2 decades even when life throws you curve balls (which will happen)?  Do you set aside time and energy to start a side hustle even when your friends are going out and having fun without you?  Do you say “no” to the tug to spend more and that desire to show the world how successful you are by the clothes you wear or car you drive?

If you do, then the only thing between you and achieving that goal is…you. 

A Different Cry:

Several years ago, I had a different moment while sitting down.  This time, I was looking at my balance sheet and realized that I had surpassed my retirement number.  There was no blubbering this time, just a calm lightness.  I felt liberated.  From then on, every day I walked into work was because it was my choice. 

The funny thing?  I realized I wanted to keep working because I was still having fun.  For now.  My 67 year old boss just retired.  Instead of the joy and excitement you would’ve expected, he had a lot of fear about how he was going to fill the rest of his days.  Do you want this fate?  You work so hard for so long that when you do have financial freedom, you’re either too old or too set in your routine to experience all the things you used to want to do. 

For someone working toward a single purpose for so long, it’s actually challenging to not have a big goal anymore.  And the time to figure out what else to do is while you’re still employed.  This is why I started Just Making Cents so that I could still have purpose and projects of my own choosing, and to have greater impact on people’s lives.

And that’s when life gets really fun.

Author bio: JT is passionate about viewing money differently, having spent over 15 years on Wall Street.  He writes about money from the perspective of faith and as a father of 3 spunky kids. 

Are you interested in learning how to retire early? Why or why not?

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Source: makingsenseofcents.com

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Last Updated: May 26, 2023 BY Michelle Schroeder-Gardner – 51 Comments

Disclosure: This post may contain affiliate links, meaning I get a commission if you decide to make a purchase through my links, at no cost to you. Please read my disclosure for more info.

Over one year ago, I published the blog post Money Statistics That May Scare You. In case you missed it, here is a refresher:

  • 68% of people live paycheck to paycheck.
  • 26% have no emergency savings.
  • The median amount saved for retirement is less than $60,000.
  • The average household has $7,283 in credit card debt.
  • The average student loan debt is $32,264.

Since then, I have come across other money statistics that have surprised me.

I do a lot of research as a personal finance writer. I come across money statistics that surprise me, make me sad, and some that make me worried.

The money statistics in this blog post might surprise you, but I want you to be aware of them so that you can be better than “normal.”

However, I do want to note that even if you are doing better than the average person, you can still improve even more.

You should always strive to do your best as sometimes “average” is not good enough for you to live a financially successful life. Keep in mind that the average person is not the greatest with money, and many are wrecked with stress and hardship due to their unfortunate financial situation.

Below are some other money statistics that will hopefully whip you into financial shape. Enjoy!

Annually, an average of $220 per person is spent on the lottery.

In 2014, more than $70 BILLION was spent on the lottery. That’s around $220 per person, including children!

However, in states such as Rhode Island, it’s way above $220, at nearly $800 per person spent on the lottery on an annual basis.

That is a ton of money spent on the lottery.

40% of food is wasted.

This is a crazy statistic.

Just think about it: What if you spent $100 on food each time you went to the grocery store, but when you got home from the grocery store you immediately threw away $40 of it.

That’s pretty much what is happening here.

The average person who takes out a new car loan takes out $27,000.

Plus, the average used car loan is almost $18,000.

To add to all of this, the people with the largest car loans actually had the worst credit scores.

One last car loan statistic, the average monthly payment for a new car loan is $471 and $352 for a used car loan.

The average person wastes their gym membership.

If you have a gym membership, I highly recommend that you figure out whether or not it is worthwhile. According to Statistic Brain, the average monthly cost of a gym membership is $58. Yet, 67% of people never use their gym memberships.

That is a ton of wasted money.

The average student loan debt is approximately $30,000.

Plus, according to US News:

  • Only 41% of college students graduate in four years.
  • The three-year student loan default rate is 15% for recent graduates.
  • Borrowers older than 60 owe $43 billion in student loan debt.

These are some crazy money statistics.

Learn more about how I paid off my student loan debt at How I Paid Off $40,000 In Student Loan Debt.

Women are 27% more likely than men to have no retirement savings.

I found this statistic on Go Banking Rates.

To change this money statistic, please read The Smart Woman’s Guide To Investing Success. Here’s a quick snippet from that blog post:

“Women face different obstacles than men do when it comes to investing in the stock market. Right off the bat, they tend to have less in savings because women often take time off to raise children. With years of not earning a salary, there is no money being saved and compounded upon.

In addition to this, women typically outlive men by close to 10 years on average. Therefore, it is important as a woman to invest in the stock market.”

What money statistics surprised you? How do you compare?

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Source: makingsenseofcents.com

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From 1945 to 1964, Americans gave birth to seventy-six million children.

These seventy million some-odd children, the Baby Boom generation, are now seventy million adults reaching retirement age, or else getting close enough to retirement age that they’re starting to think through financial goals for their golden years.

For Baby Boomers, what financial goals should be most important, especially during these difficult economic times?

1. Eliminate Any Debts

Getting out of debt is important for all generations, not just Baby Boomers. However, for Baby Boomers, with retirement either looming or already starting, getting out of debt takes on extra importance.

Once you’re out of debt – including paying off the mortgage early – you can really start to enjoy those golden years. You’ll have the extra money you need to travel the way you always dreamed of, or spoil your grandkids for years to come. For all ages, debts are a drag on the finances; for people with fixed incomes, debts are especially dangerous.

2. Increase Retirement Savings

For the generation that once said, “Trust no one over thirty,” it’s hard to imagine that retirement is just around the corner. Maybe it was the culture of youth that kept you from saving for retirement in your twenties and thirties, or maybe it was just plain ignorance. At any rate, it’s never too late to start saving and investing to increase the size of your nest egg. Even if you’ve reached your early fifties, you still have close to fifteen years of working life to save for your retirement.

Financial author Dave Ramsey suggests that you save at least fifteen percent of your gross income towards your retirement. While a Roth 401k and Roth IRA retirement accounts are good places to start, they may not be enough if you started saving for retirement late in the game. If you did start saving late, talk to a financial advisor about more aggressive investing.

3. Get Healthy

What does getting healthy have to do with your financial decisions? If you’ve paid a doctor or hospital bill recently, you’ll realize that your physical health has everything to do with your financial health.

Although Baby Boomers might not want to admit it, their body is starting to get older, and that means more health problems are coming. Unless you want to spend that money you set aside for a trip around the world on medical bills, implement a diet and fitness plan now that you can live with. Considering the uncertainty of healthcare in the United States, who knows what will happen to the availability and expenses associated with medical care by the time you reach retirement? Therefore, now’s the time to lose the weight, quit the smoking, and cut back on any other indulgences that harm your health. An investment in your local gym, hiking club, or yoga studio could be one of the smartest investments a Boomer can make.

4. Create a Retirement Budget and Educate Yourself

Although it may sound like a no-brainer, a surprising two-thirds of people nearing retirement age haven’t yet created a budget for their retirement. Creating a retirement budget, along with a strategy for how you’ll draw from your nest egg, is a critical planning step for your upcoming retirement.

Fidelity recently surveyed recent retirees, asking them what they wish they would have done before retirement. When they asked the question, “What advice would you give to a family member or friend who’s within a year of their retirement?”, the most common answer was to seek guidance from a professional advisor to help with the transition.

Does your employer offer any resources that might help educate you for your upcoming transition? In Fidelity’s survey, 32% of the people who turned to their employer for guidance said they couldn’t have made the transition into retirement without the extra help.

5. Start Dreaming Now

If you’re a Baby Boomer in your late forties, fifties, or sixties, you owe it to yourself and to your family to stop procrastinating and take these financial steps now. Even if retirement hasn’t hit yet, it will come sooner than you think. You want your retirement years to be trouble-free, giving you the freedom to live where you want and how you want, whether that means selling your house and getting an RV to tour the country, or buying that beachfront property or cabin in the mountains.

Source: goodfinancialcents.com