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Top Financial Planning Tips for Retirement A sound retirement plan is essential if you do not want your old age to be filled with financial misery. With retirement experts predicting that 70 to 90 percent of your income will be needed to sustain your current lifestyle through retirement, this matter should be taken seriously. To avoid a future of misery, here are top financial planning tips that will help you through retirement. Include a retirement planning expert so that you can get the necessary assistance in coming up with a strategy that will remain relevant throughout the years to the date of leaving employment. An expert will also help you to maintain your focus because it is easy to give up, especially when planning something long-term. Only deal with certified financial planners to guarantee that you get the best outcomes. Early saving for retirement is recommended by financial planning experts. The amounts you save today will earn compound interest, meaning that time is a critical factor in determining the amounts you end up receiving at retirement. Starting early also means you will also save for more years than doing the same a few years to come.
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Make contributions to the retirement savings plan that your employer has in place. If the organization you work for has a scheme such as a 401(K) plan, ensure that you chip into it as much possible to help the amount to accumulate to a substantial figure due to compound interest. Besides, your contributions will lower your tax liability considerably.
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You cannot tell how a certain investment will perform into the future, so make certain that you diversify to stay safe. The other advantage of diversification is that you will have an array of options to pick from when deciding between the most lucrative investments to turn into cash and those to leave for a few years. Persons who start saving late for retirement can use the stock market to catch up with the rest. Caution is, however, necessary because it is also a risky market at times. With such a fact in mind, diversification will save you a lot of financial woes. No matter how things get bad, kill the urge to withdraw your retirement savings. An early withdrawal will result in the loss of your principal, interest, and tax benefits, leading to huge losses. You may also incur early withdrawal penalties that may reduce your investment further. Make certain you have a cash cushion because the markets may plummet just as you are about to leave employment. Financial planning experts advise on maintaining such a fund at two years your earnings for two years to offer you the buffer required when dealing with unexpected happenings. Such an amount will help you to cater for all your expenses as you wait for the markets to return to normal.

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