How To Build a Retirement Plan

December 6, 2019

It is never too early to start planning for retirement. In fact, the sooner you start, the more you can save away to enjoy your golden years. You can get in touch with a Los Angeles accounting professional if you need some assistance. However, there are some simple steps you can take right now to bolster your portfolio.

Create a Tax-Deferred Retirement Account

If your job offers a 401(k) plan, then you should take advantage of it. Ask an HR representative for the contribution paperwork and specify you want a portion of your wages to go into it. In the event you do not have a 401(k), then you will need to create your own IRA. You will need to transfer funds from your bank account into this separate account.

Set Aside 15% of Your Income

A reputable accountant service Los Angeles will tell you to set aside roughly 15% of your annual income. This may sound like a lot, but it pays off in dividends in the long run. If you start saving when you are 30 years old, then you could easily set aside over $1 million by the time you reach 65. If you start saving for retirement when you are older, then you may want to consider saving even more.

Check in Annually

You should see your Encino accountant at least once a year to see how well your portfolio is doing. Your accountant may suggest investing in a few more stocks if you are playing it too safe. You should also discuss putting your money in a target date fund, which allows you to choose investments based on when precisely you plan on retiring.

If you retire at 65, then you could still have 20 or 30 years of fun to have. Make sure you are prepared financially for this time of your life so that you do not have to continue working more than you need to.