Pros and Cons of A Retirement Financial Plan for 2021
December 30, 2020at10:30 PM
There’s no denying the uncertainty in the world today, but that doesn’t mean you have to postpone your plans for retirement until 2022. Putting off your scheduled retirement for an entire year may not even be feasible if you’ve been working hard towards this moment for decades. Retiring on schedule won’t necessarily come without consequences. We’re looking at the pros and cons of a retirement financial plan for 2021 and offering resources to help you decide if this is the year you begin the next grand adventure in your life.
Beware of these cons when making a financial plan for retirement in 2021.
Depending on how you’ve invested your retirement savings, there are always risks associated with exiting the workforce.
A potential stock market crash in 2021. There isn’t anything to show this is likely, but given how unpredictable 2020 proved to be, you may opt to bulk up your emergency savings.
Limited options for travel and recreation. The world isn’t going back to “normal” any time soon, so if visiting friends and family and travel were at the top of your list for retirement, you might stay in the workforce until you’ll be able to do the things you want.
More unexpected expenses. Whether it’s children moving back in with you because of job loss, or medical expenses because of COVID, there’s more uncertainty in the world, and with it may come costs that could wipe out your retirement savings.
The good news is it’s possible to plan for these threats and develop a sound financial strategy for not only retiring when you want but doing so with confidence in your future security. Retiring in 2021 is not all bad; it comes with some clear upsides.
Consider these positive reasons for retiring in 2021.
The most obvious upside to retiring in 2021 is that you get to enter the golden years of your life. You’ve worked your entire life to make your golden years comfortable. Despite the trials and tribulations of 2020, you’re ready to retire and experience these pros:
You’ll be more cautious. Now that you know how chaotic the world can be, you’ll likely be more cautious with your retirement savings than many generations before you. Because of that, you’ll have a beefier emergency fun, more cautious investment portfolio, and an emergency home equity line ready to go.
New Social Security changes for 2021. Social Security earnings will increase by 1.3%, starting in January, and you can continue to earn more income if you work part-time before your benefits get withheld.
Now’s the time to tackle debt and maximize HSAs. If you want to retire before the end of 2021, spend your last months in the workforce bringing down your debt and maximizing your contributions to your health savings accounts.
A retirement specialist can help you develop a financial plan for retirement that will let you exit the workforce securely with confidence in your financial security for the future.
You don’t have to figure out retirement by yourself. In fact, you shouldn’t. By working with a team of experienced financial planners like those at OWLFI, you’ll become better informed about what you need to retire comfortably and actionable steps you can take today to maximize your wealth.
At OWLFI, they’re your partner in wealth management. They’ll not only tell you how to grow your wealth, but why they’re advising you to do things a certain way. They take a team approach to every client, calling on experts in tax planning, insurance, and legal services to provide a holistic approach to your financial plan for retirement. If you want to move closer to retirement, contact OWLFI today.