No matter what age you are, retirement planning is a significant part of securing your financial future. The truth is it’s never too early to take stock of your assets and figure out how you can save up enough money to retire. Despite financial advisers stressing the importance of retirement planning, the U.S. Department of Labor estimates that more than half of Americans have not calculated how much money they need to retire.
Define your retirement goals
Be practical about your goals and wants as far as retirement. Although you may wish to take exotic vacations around the world once you retire, this may be fiscally impossible based on the money you have available to put away. Retirement experts say you need anywhere from 70 to 90 percent of your income in order to maintain your standard of living once you retire. If you wish to do more than just remain comfortable after you retire, then you’ll need more money to reach your goals. Create a budget and estimate your post-retirement income versus your projected expenses.
Save, save, save
When you’re in your 20s and 30s, you may not have a sense of urgency about saving for retirement. At this point in your life, you may have more pressing concerns such as paying off college loans or earning enough money to support a family; however, at the very least, you should contribute to a 401(k) plan offered by your employer. If your employer doesn’t have a 401(k) plan, then a Roth IRA is another tax-free option available for retirement savings. A good savings strategy to implement is to set a specific amount to be taken out of your earnings each week for investments. For instance, a goal you could have is to save at least 10 percent of your income each month.
Ignorance is never a valid excuse for poor retirement planning. Make it a point to stay in the know about your employer’s pension plans and what benefits are passed onto you. Find out options of rolling over accounts if you lose or switch jobs.
Learn how to diversify your investments and how returns are affected by inflation. Social Security pay benefits are also evolving and you can visit the Social Security website for information on what benefits you’re likely to be eligible for once you reach retirement age. Make a determination of what age you plan to collect benefits from Social Security, since the longer you wait, the more benefits you receive.
Take a shrewd look at your assets
At any age, take the time to evaluate your current assets. Review investment and savings statement accounts to judge whether you’re on track with your retirement goals. If you seem far off, make a plan to curb unnecessary spending. Strategies may include eliminating credit card debt and spending less on splurges such as annual vacations and expensive dinners out.Call today for more information.
Published January 19, 2016