Many people find themselves trying to not think about retirement planning. Like health issues, retirement planning can be scary to some. That said, it doesn’t have to. Learning about retirement can ease all of your stresses. When making plans for your retirement, considering the following is a great place to start.
Examine your situation and know what you need to retire. It will cost you approximately three-quarters of your current income. For those with low income, it may be even higher.
Reduce the little things you buy every week. Create a list of your expenses and see which you are able to live without. Get rid of these items and watch your bankroll grow.
Start a savings account while you’re young, and contribute to it regularly throughout life. Even if you can only save a little, it’s important to do it now. As your income rises, so should your savings. Keeping funds in interest bearing accounts helps grow the balances.
Contribute regularly and maximize the amount you match the employer. The 401k is going to let you put back some pre-tax money and that means you can save a little while not affecting your paycheck too much. With an employer match, you are basically getting free money.
With plenty of free time during your retirement, you have no more excuses for not getting into shape. You will really need to care for your body in retirement, because it’s important as you age. Workout regularly to help you enjoy your golden years.
Employer Offers
Look at the savings plan for retirement that your employer offers to you. Take advantage of any retirement plans that your employer offers. Learn what you can about that plan, how long you must keep it to get the money, and the amount you need to contribute.
People think that they have plenty of time to get ready for retirement. Before you know it, time has slipped past, and you haven’t enjoyed it fully. You can make better use of your time by planning ahead.
Think about a health plan for the long-term. For many individuals, health will decline as they age. For some people, poor health means they need more healthcare. Obviously, the costs can add up. If you have factored this into your plan, you’ll be well taken care of should the need arise.
Check out the pension plans your employer provides. Learn everything you can about it before you invest any money. If you happen to change jobs, find out what will become of your plan. Can you continue your benefits from your current employer? You may also be eligible for benefits via your spouse’s pension plan.
Catch up contributions can be very beneficial for you. Typically, there is a limit of $5,500 each year which can be contributed to an IRA. If you are older 50, that limit will triple. If you’ve gotten a late start on your retirement planning, this will help you save retirement funds at a quicker pace.
As you near retirement, attempt to pay off all the loans you can. If you don’t have to pay a mortgage and car payments, your budget will be smaller. The less you need to pay for during retirement, the more you will be able to enjoy that time of your life.
Do not assume that Social Security benefits will provide you with enough money to live on. It can pay around 40% percent of your income now after retiring, but that’s not usually enough to live on. You actually require 70-80 percent of your salary, though, if you want to enjoy your time in retirement.
Once you retire and are trying to make your money go farther, downsizing is something to consider. Your mortgage may be paid in full; however, the maintenance and utilities on a large house can put a dent in your retirement funds. You may even want to thinka bout moving into a condo, townhouse or smaller house than what you currently have. This can save you a lot of money each month.
Retirement is the perfect time to spend time with grandchildren. You may have children who need occasional help with childcare. Try spending time with the grand-kids by having fun and planning activities that you can all do. But avoid becoming a full time baby sitter.
What does your retirement income look like these days? Be sure to consider things such as social security, employer pensions and interest from savings accounts. Security comes with multiple income streams. Do you have other income sources that you could consider that could still earn from after you’ve retired?
Discover all you can about Medicare. You may have a private insurance plan and you need to know how the two will merge to off you the best health care. Understanding how your insurance and Medicare work together is the best way to get the most out of them.
Social Security
You will need more than Social Security to support yourself after retirement. Although it will help you out somewhat, for the majority of folks, it’s simply not enough to go around. Social Security benefits normally provide you with approximately 40 percent of the amount you earned when you were still in the workforce.
Get out of debt before retiring. Old debt is a burden you don’t need during your golden years. Get your finances in order now or you can look forward to a very stressful retirement.
Parents are almost always concerned with saving for their children’s education. It’s more important to save for retirement. College students have other options such as loans, scholarships and work-study. You won’t be able to do these things post-retirement, so consider them now.
Retirement may be a lot of fun. Don’t put it off until it’s too late. Use what you’ve learned today to customize your plan. Once you start planning, you’ll stop dreading the process.