5 Tips To Help You Save Money for Retirement

Whether you're 20 years old or 50 years old, it's never too late to start saving for retirement. The problem is many people aren't sure where to begin. Where do you see yourself spending your golden years, and what do you hope to do with your time? Think about your future plans as you read on to consider which retirement planning options may work best for you.

1. Create and Maintain a Diversified Portfolio

The more diversified your retirement portfolio is, the more likely you are to have what you need when the time comes. A well-maintained portfolio will include a variety of bonds, mutual funds, stocks, and other financial assets. A retirement advisor can help you decide which types of investments will best meet your future needs by creating an asset allocation strategy with you. It helps you to weigh risk versus reward based on your financial risk tolerance, individual goals, and investment horizon.

2. Wait as Long as You Can To Collect Social Security

The amount of social security you receive depends on how old you are when you start accepting payments. The longer you wait, the more money you will receive each month when you do begin to collect. When you decide to claim your benefits may affect your spouse as well. If someone claims benefits early and passes away, the person's widow or widower doesn't receive 100% of the benefits. Someone who didn't claim early benefits would leave behind 100% for his or her spouse. Additionally, every year you wait up to age 70 will earn an increase in benefits. Keep in mind that nobody can receive social security retirement benefits until they are at least 62 years old.

3. Plan for Your Health

Successful retirement planning requires evaluating your health. Keep up with annual checkups, schedule preventive exams as recommended by your doctor, and speak with him or her regularly about how you can maintain or improve your current health to create a better future. Part of health evaluation includes obtaining proper insurance policies. Even if you feel amazing today, you never know what the future holds. A strong health insurance plan that can cover events related to unexpected long-term disability or rehabilitation stays reduces future financial risk. Sign up for a life insurance plan now, and evaluate it once a year to make sure it is still the best one to meet your needs.

4. Set Up Retirement Accounts

Take advantage of any employer-sponsored retirement plans, such as a 401(k). Many companies match at least a percentage of what you put into your 401(k), so put in as much as you can each paycheck. Additionally, create an individual retirement account.

There are several types of IRA accounts. A traditional account is the most popular, but Roth IRA accounts are common as well. A range of other options are less common but available. Your financial coach can help you determine which one is the best option for your needs.

Once you're at least 50 years old, you may be able to do catch-up contributions. When you get close to retirement, consider combining your accounts. Doing so makes it easier for you to get a clear picture of how much you have to retire on and makes managing your finances less complicated.

5. Pay Down Your Debt

While you're still working, do your best to pay down debt and avoid creating new ones. If you can, pay off your mortgage payments or car loans faster. Pay off credit cards and avoid signing up for new ones, save for one card for emergencies only. The more conservative and responsible you are with your money now, the more you'll have to enjoy when you retire.

The many options there are for saving for retirement can feel overwhelming to some. Don't be afraid to ask for help. A professional retirement advisor can help you create and stick to a plan that helps you make the most of your finances now and in the future.