Preparing for retirement requires accumulating assets to cover your financial needs later in life. Most people try to establish a budget for their post-retirement years, or a specified percentage of assets that can be tapped annually without running out of money. Many forget to establish an emergency fund for their golden years or think it isn't needed. However, the reality is that you still need readily accessible cash that you can use for unexpected expenses.
Today's roller-coaster economy deserves the attention of every actual or wannabe retiree, especially those who've invested in a Roth IRA account. As stock market values rise, so do retirement account values, which makes taking a distribution a tempting option. However, as one of those account holders, you may not know how that distribution might affect your account - and your tax situation - in the long run. Don't do anything until you've gotten the advice you need to protect your future.
Deciding when to retire requires a taking holistic look at your finances. How much money you'll need and how long it will take to save that amount depends on your lifestyle, current assets and long-term goals. To develop a realistic savings target, you first need to estimate your expenses in retirement. Then you should consider the different sources of income you will have and the payments you can expect from each at different ages. Finally, you'll want to ensure you're prepared for the unexpected, whether that's a major expense or just a long life.