For our parents or grandparents, retirement used to mean dad/grampa1 working at the same company for 30 or 40 years (likely in a physically demanding job) and then stopping work completely and collecting a company pension and Social Security benefits
While they’re both worth getting excited over, it’s important to understand the key differences between tax credits and tax deductions.
Too often people start thinking about their taxes when they are completing their prior year tax return. While you can learn from prior years, planning based on last year is like driving your car through the rearview mirror. So, let’s think ahead.
I came up with what I thought was a good plan. We agreed she would save $60,000 a year over the next twelve years and spend $30,000 a year as she saw fit. In twelve years, following this plan, she could accumulate approximately $1,000,000**. Since at this point, she was still under a normal retirement age, there was the opportunity for this $1,000,000 to potentially grow further before she retired.
Downsize / change your living situation – For many pre-retirees, they are still living in the home that they raised their kids in. Do you still need 4 bedrooms, a den, dining and living room, man-cave / she-shed and large kitchen? What about the large lawn? Do you still need all that stuff in the basement or garage, too? A smaller place is more efficient and possibly less expensive to maintain.
Through $avvy Ladies, I offer help to women of modest means become more financially empowered. Most are struggling with debt which we usually tackle first before moving on to other life goals. With over 25,000 women helped in all 50 states, it is clear there is a need for this type of help.