It’s one thing to not save for retirement; yet, it is another to actually have accounts and be disinterested in their whereabouts and performance – neither is particularly wise. Retirement planning emphasis is largely on those in or nearing retirement, but there are some things that the pre-retiree can do now to plan for their golden years.
Aside from obviously contributing to a retirement plan, the pre-retiree should locate their existing retirement accounts and maximize them. Very few things stay the same – including the current job market. Today’s lack of job stability and the scarcity and uncertainty of pensions makes it increasingly important for the pre-retiree to plan.
Pre-retirees disregard the importance of locating accounts with previous employers and subsequently maximizing those accounts over the many years before retirement. One way to maximize an existing retirement account is to place the funds in an account that guarantees growth until you are ready to retire and then use the account to pay income for life. The concept is similar to a pension and works well for those who will not receive a pension or would like to supplement their pension.
If you have accounts with several of your previous employers it may be possible for you to combine them into one retirement account. Combining accounts cuts down on clutter and one may find it easier to keep up with their retirement affairs.
It is important to keep in mind that retirement accounts are for your retirement years. Consequently, if you use the funds prior to age 59 ½ the IRS may assess a 10% penalty. You should also be cognizant of fees on your existing accounts and the accounts that you are considering. Avoiding penalties and keeping fees at a minimum can equate to more funds during retirement.
*This article is not intended to give any investment, legal or tax advice. One should consult with properly licensed and knowledgeable professionals