If you're a young or middle-aged person, you might think retirement is so distant there’s no need to worry about it yet. However, financial specialists say early retirement planning, no matter your age, will serve you well in the long run. The CPAs at the accounting firm of Tostrud & Temp, S.C., in La Crosse, WI, understand the value of preparing for a secure financial future and share advice to get you started.
3 Tips From CPAs for Early Retirement Planning
1. Focus on Reducing Debts
Retiring with substantial debt will restrict your lifestyle and could create financial problems. Start repaying debts now, making extra payments whenever possible to ease the burden. This will help you develop a healthy approach to loans and credit that will serve you well in retirement.
2. Contribute to a 401(k)
If your employer offers a 401(k), take advantage of it. Deposit a set percentage of each paycheck into the fund automatically, and never withdraw money early unless there’s an extreme emergency. Even if you can contribute only a small sum, you will be pleasantly surprised at how quickly it accumulates into a comfortable nest egg.
3. Keep an Emergency Fund
Many people elect to invest in stocks when planning for retirement. While this can be a lucrative move, you shouldn’t dedicate all your funds to it. Keep some cash in a savings or money market account for emergencies. However, since most of these accounts can’t match the annual rate of inflation, you should not put a significant amount of money in savings, either. Consult a CPA to review your expenditures and help you determine the right amounts to invest and save.
An experienced accountant will help you design an excellent retirement strategy at any age. The CPAs at Tostrud & Temp, S.C., can assist you with accounting services and tax planning to keep you on sound financial footing. Call (608) 784-8060 to schedule a consultation about retirement planning and visit their website for more information about their services. Check their Facebook page for additional insight from their experts.