Protecting your long-term savings accounts is a central component of wise financial stewardship. Fortunately, there are several simple tactics for safeguarding personal retirement wealth. In addition to knowing the rules for withdrawal times and amounts, it’s essential to be aware of how cosigning on another person’s loan can affect your credit scores. Additionally, it’s imperative to be watchful for pitches from gold IRA companies, most of which are not smart investing vehicles for older adults.
Then there are the telephone, email, and direct mail scams to watch out for. Culprits tend to prey on retirees. Finally, be sure to continue using a monthly budget, no matter your age. It’s tempting to delve into travel after leaving a career behind but keep tabs on spending even when it’s no longer necessary to work every day. Consider the following details for protecting your life savings.
Review Withdrawal Rules
Those who are near retirement age or there already should be vigilant about the rules and guidelines that govern their account withdrawals. Not only are there several kinds of IRAs, but employer-backed 401(k) plans also feature a wide variety of withdrawal-related restrictions. If you pull cash out of a standard IRA before reaching the right age, the government will be happy to impose a hefty fine along with regular income tax on the withdrawal. The solution is to read the fine print of your plan and abide by the timeline. Remember that many plans have mandatory deadlines by which you must take out a certain amount of money. Those deadlines are also a crucial part of the timing process. Ask your tax professional or lawyer if you have any questions about the requirements.
Be Careful About Cosigning On Student Loans
If you’re a grandparent, it can be easy to agree when a teen grandchild asks you to cosign on a college loan. Of course, being a cosigner is a fast and easy way to assist with educational goals. Many kids can’t get approved for private loans without a cosigner, so they tend to ask parents and grandparents for help. But, as much as you might want to, be cautious about adding your signature to another person’s loan application. Think of how the move might impact your credit rating and ability to borrow in the future. There are other factors to consider when it comes to being a cosigner, so don’t be too quick to agree to the request.
Steer Clear of Gold IRA Solicitations
Gold IRAs are a special kind of self-directed account that lets investors hold precious metals and other asset classes in their retirement funds. For most retirees, gold and silver are not the wisest of investments because they offer no guaranteed growth and can take a long time to increase in value. Companies that market the products tend to be aggressive and work hard to contact seniors via telephone, direct mail, and email. There are other types of pitches and come-ons that aim at the over age-60 demographic. Never reveal personal data or financial information of any kind to someone who contacts you via phone, especially if they say they’re from the Social Security Administration or Medicare.
Don’t Overdo the Traveling
Traveling after the end of a long, rewarding career is one of the most natural human instincts. Hardworking adults spend decades dedicated to their jobs and naturally look forward to a nice rest in a trip or two. Some stick close to home, while others venture to exotic overseas locales. Fortunately, many agencies cater to older clients who want low-cost options. But it’s essential to plan journeys with expenses in mind. Like it or not, retirement usually means living on a fixed income. Map out excursions well in advance to snag early-bird discounts. To save even more, consider group tours and church-sponsored packages to minimize the cost of fun getaways.
Continue to Live on a Budget
Refrain from tossing the monthly budget after your work life ends. Instead, revamp it to accommodate all the changes. Most people discover that income and expenses change quite a bit, with the former becoming more fixed and the latter smaller, at least in most cases. Budgeting is the secret weapon that can give retirees significant financial freedom. Work with a licensed financial planner to develop detailed monthly, annual, and long-term budgets to suit your post-career years. Find a professional who specializes in assisting older clients with crafting realistic spending plans that account for changing income levels, tax situations, and insurance needs.
