What are the 3 best tips for preparing for retirement?
We’ve all thought it: this rat race ain’t it. There has to be more than working a typical 9-5 for 30 years then retiring when you’re old and wrinkly. Striving for financial independence before the 30 years? Well you’ve come to the right place! We’ll dive into preparing for retirement.
This post is about preparing for retirement.
1. Emergency Fund
A hefty one at that. Assuming you’ve invested quite a bit throughout your life, you’ll likely want to have a hefty emergency fund.
Why?
The amount you invested will now be your source of income, and if the market isn’t doing too well, you may not want to sell and withdraw your funds when the market isn’t too hot. That would be like selling at a discount.
In order to prepare for this, it is recommended to have an emergency fund that exceeds the typical 6 months. Think several years. Whatever you need to be comfortable you won’t have to touch your investments until you want to.
This emergency fund may be even more if you have rental properties or other large expenses (kids’ college) that will occur sometime soon. The rental properties aspect is in the case the property has a few months where there isn’t anyone renting or if your renters are late or miss a payment.
2. Health Insurance
It’s easy to overlook this, because while you’re employed at a typical 9-5, it’s provided to you at a subsidized cost (hopefully). However, once you retire, you’ll no longer have this benefit. (Though this largely depends on the company you work for.) You’ll want to look into what your options can be for health insurance.
3. Bridge Investment
Whatever you want to call it. This is for those who want to retire before 62-65. You’ll need something to bridge you over from your job to when you can pull from your 401(k) without incurring penalties.
To recap, the 3 best tips for preparing for retirement are:
1. Emergency Fund
2. Health Insurance
3. Bridge Investment
There you have it! The best tips for preparing for retirement. Any tips you’re taking away from this and implementing on your journey to financial independence? Interested in learning more about retirement? Check this post out for the differences between Roth IRA vs 401k!
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