Retirement during a volatile market is unsettling. Whether you are on the cusp or have already made the leap, a market downturn’s impact on your savings will be felt now and potentially for years to come. Here are a few tips to help you keep your plan on track and your desired lifestyle in place.
Set a realistic budget and stick to it.
No matter how carefully you budget, somehow, the numbers on the spreadsheet don’t mean much when confronted with fun, seeing family, a quick weekend trip, or anything spontaneous and last minute. Reviewing your budget to ensure you keep your spending at a level that is commensurate with your income is critical.
Plan Proactively to Reduce Taxes
Planning strategically for taxes can help you keep more of your income. This can compensate for budget shortfalls or help you give long-term capital growth investments the time they need to recover.
Maximize Tax-free social security income
Social security benefits have a tax-free component of at least 15%. Whether you pay taxes on the other 85% depends on your overall income level, but you can increase your tax-free income by maximizing your benefits. Waiting until age 70 to claim increases your annual benefit by 8% for every year from your full retirement age (FRA).
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