Downsize Before You Retire
You’ve probably heard about downsizing during retirement, and that’s a very good plan if you already have some savings. But if you want to boost your savings, even more, it’s better to downsize before you clock in at work for the last time.
First of all, you’ll gain a significant amount of money from selling your home, and, after you buy a much smaller one you’ll still be left over with enough cash to solidify your nest egg. Secondly, you’ll have smaller property taxes to worry about, not to mention reduced maintenance and upkeep costs.
Finally, think about all the extra furniture and stuff you can sell for a nice little profit. Clearing out your attic, basement and garage could uncover some hidden gems. If you have any antiques, they could be worth a fortune!
So, take this step sooner rather than later and start using various savings accounts to store the thousands of dollars you’ll gain in the process.
Know Your Retirement Plan Options
Having a 401(k) is wonderful, particularly if your employer matches your contributions! But you have to watch out because deductions from these accounts will be taxed at your current income tax rate. This might not be beneficial to you during retirement!
It’s time to also look at other options, particularly Roth IRAs. Your withdrawals will be tax-free because you won’t be able to deduct your contributions. Forget about taxes later as long as you worry about them today- neat, right?
Taxable brokerage accounts are also a good option. These are taxed at the long-term gains tax rate if you hold on to them for at least one year. If you save with the help of such accounts you’ll avoid a bigger tax burden when you retire.
