Hello darlings! I don't know about you but since I've become a mom I can't stop thinking about security. All kinds of security actually. Before Natalia, it seems I didn't have a care in the world (not true but if you are a parent you get this). Now all I can think of is what will happen if I lost my job, if I got hurt or worse. Today's situation here is not the best so planning ahead seems like a must! 

As far as financial security goes planning for retirement is an important step in ensuring you security. This can be a challenging endeavor for many that involves follow-through and planning. Below are six tips to ensure that reaching financial security is achieved. 

Start ASAP

Starting to save at an early age is the ideal, but it is never too late to start, even if retirement age is approaching. If two hundred dollars is saved every month for forty years at around a five percent rate of interest, a significant amount will be saved as opposed to a person who has only saved for ten years at the same rate. 

As retirement age approaches, it is also important to look at things such as asset allocation and risk tolerance. Decreasing risk as retirement approaches is important, as losses won’t be as easy to recuperate in the few years left before retirement. 

Save in a Tax-Deferred Account

Adding money in accounts that are specifically earmarked for retirement into a tax-deferred account helps to deter from spending on impulse, because tax consequences will be applied. 

For example, any amount that is distributed from a retirement account is subject to income taxes, and if taking the distribution before age 59 and a half the money is subject to a ten percent penalty. If there is enough income, perhaps increase the amount saved in the tax-deferred account. This can mean not only contributing to an employer sponsored program, but also contributing to an IRA of some sort.

Treat Savings Accounts as an Expense

Saving money can be a challenge, especially with the regular expenses of daily living. Creating a nest egg that will divert spending on impulse buys is a good way to ensure financial security. Having a part of the pay check direct deposited into a savings account is a great way to start a nest egg. Direct depositing into a retirement account also helps to divert spending.

Paying off Debt

Paying debt down or off is important to financial security, and will allow for more savings in the future. A good way to pay off debt is getting a personal loan. Looking into different lenders and how the lenders do business is a good way to start the process. All lenders have different terms and rates based on credit scores. Lending companies, such as Creditful.com can help get this process started. 

 Portfolio Diversification

Making sure not to put all the eggs in one basket, so to speak, is sound advice for financial success. 

 For instance, don’t put all savings into one form of investment, as this could increase the risk of losing all the money, without hope of recouping it. This could also limit the return on investment. Asset allocation is a good tip to managing savings and retirement assets. The important factors to consider in asset allocation are as follows:

  • Look at risk tolerance; this can help to ensure that any losses that do occur and be recouped.
  • Look at age; this will help determine how aggressive the portfolio should be, take more risks when younger, less as retirement age approaches. This is sound advice for recouping loses when younger, instead of losing the money when older, without hope of regaining them.
  • What is the purpose of the assets? Do the assets need to produce income or grow?

 Reassess Expenses, Make Changes, and Work with an Experienced Financial Planner

If anything has changed in lifestyle or monetary responsibilities, it is always a good idea to reassess financial profiles. Once it is assessed make the necessary adjustments; this could mean changing amounts deposited into retirement or nest egg accounts, and many other factors. 

When looking at all of the options make sure to talk to an experienced financial planner. 

 Engaging the services of such an individual helps to ensure financial stability. A financial planner is an expert at portfolio management and is qualified to give advice on funds, stocks, and any other investments that are warranted. 

Above are a few of the factors that are important for financial security. These factors rely heavily on expert retirement and nest egg planning. A financial planner will help to determine if there are additional factors reliant upon the client’s income and lifestyle that may need to be looked at. 

Starting early is often the key to success and can make financial security a lot easier to obtain. It is also important to note that it is never too late to start saving and adopting some of the above practices, even if retirement age is fast approaching, or retirement has already occurred.