Although you may have several years of work ahead of you before reaching retirement, it’s never too early to start preparing for the transition. The sooner you begin getting your finances in order, the easier it will be to avoid economic hardship in your golden years. Working with a certified accountant will help ensure you’re on track to achieving your goals so you can enjoy retirement to its fullest. Here are a few steps you can take to financially plan for the future.

How to Prepare Your Finances for Retirement 

1. Estimate Your Retirement Expenses & Budget

First, estimate how much money you’ll need. Look at your current expenses and determine what you think will change by the time you retire. Take into account plans such as traveling or moving to a smaller home. Next, identify the different kinds of income you expect to have available from sources including savings, Social Security benefits, pensions, and annuities. A certified accountant can help you explore strategies that will maximize the money you receive.

2. Eliminate Debt 

You don’t want to retire with a significant amount of debt. If you owe on high-interest credit cards, focus on paying those down first, then move on to other types of debt you have. This will keep your bills from taking up a substantial portion of your retirement savings. Set enough money aside in an emergency fund to prevent having to use a credit card for unforeseen expenses. 

3. Contribute to Retirement Accounts 

If your place of employment offers retirement benefits, such as a 401(k) or a Simple IRA, capitalize on the chance to contribute to your financial future. Generally, employers will match employee contributions up to a certain amount, which means you'll get free money to put toward your retirement. Contributions to a retirement account will also lower your taxable income, in turn, reducing your tax liability. 

4. Consider Your Insurance Needs 

Retirees often spend the bulk of their income on healthcare. Despite receiving Medicare, coverage won’t include all your medical expenses. As such, look at other options with your certified accountant. Whole term life insurance policies accrue cash value with every premium payment, which can help pay for medical bills. Also, long-term care insurance will cover in-home care or a nursing facility, if necessary.  

Being proactive about retirement planning will provide you with economic security even when you’re no longer earning an income. If you’re ready for an experienced certified accountant to assist you in preparing for your golden years, contact The Callen Accounting Group, PLLC in Mountain Home, AR. Over the years, they’ve become the go-to source for residents throughout the Twin Lakes area who need reliable financial advice and guidance. Call (870) 425-6066 to set up an appointment, or visit them online to learn about the different services they offer.