Readers of my articles know that I am a huge fan of compound interest. With the holiday season already entrenched in retail stores and online, it seems that everyone wants to sell you something as a gift for your friends or family. But for most people, you’re not being given the opportunity to enjoy a worry-free retirement. So in the spirit of the holiday, give yourself the ultimate gift of a hassle-free retirement. Over time, those retirement accounts will yield interest and compound interest, amounting to sums that are larger than you might think.
If you are age 701/2 or over and own either a traditional IRA, 401(k) plan or other employment-based savings plan, you are usually required to withdraw a certain amount of money each year. These withdrawals are minimum required distributions (MRD), or what can also be referred to as required minimum distributions (RMD). For consistency purposes, I will refer to them as minimum required distribution (MRD). MRD is usually taxable income, so if you made after-tax contributions to these accounts, part of your minimum required distribution may be nontaxable.
Everything is going digital. There are even companies that sell a suite of services called “robo-advisors” that offers subscribers a “low-cost, algorithm-derived, passive strategic asset allocation.” Service providers claim that using their technology platform, investors no longer need to use a financial advisor.
If you’re in your 50’s and haven’t yet started to plan for your retirement, do not panic. But do start to take action now. Even for late-starters with nothing put away, there are viable retirement options. Follow these steps to ensure that you still can live comfortably when retirement comes.