Are you in need of retirement planning assistance? That’s no surprise. There are many options available, and they can be confusing. You might feel rather overwhelmed and not know where to even begin. The tips that lie ahead will enlighten you.
Determine what your needs and expenses will be in retirement. Studies that have been done state that the average person needs about 75 percent of what they normally make today in order to survive retirement. Lower-income earners may need as much as 90 percent.
Save early and save often. Even if you don’t think you have a lot to put toward retirement, save as much as you can, no matter the dollar amount. Increase your savings as your income rises. Placing your money in an interest bearing account will allow your money to grow over time resulting in greater earnings.
Long years at work make retirement seem great. Most people assume that retirement will be mostly fun because they will have so much time. In reality, your retirement plans need to start many years or decades before you actually retire.
Think about a partial retirement. This is a good idea, particularly if you need a break but you just can’t afford full retirement. Perhaps you could drop down to part-time hours at work. You can transition your job to allow you more freedom while you adjust financially.
You should take a close look at any retirement plans that you participate in with the company you work for. Sign up for your 401(k) as soon as possible. Learn all you can about your plan, the amount you must contribute, and how long you must stay with it to obtain the money.
If possible, consider putting off tapping your Social Security benefits. This will increase the benefits you ultimately receive. It is easiest to do this if you are still able to work or can pull from other retirement income sources.
When you retire, think about cutting back in various areas of your life. Although you may feel like you have everything figured out, you never know when a financial emergency will occur. Medical bills and things like big house fix expenses can really hit you hard during your life, and they are really hard to deal with when you retire.
A lot of people think that when they retire they can do things that they have never had time for in the past. However, time often seems to speed by as we age. Planning your activities a day ahead can help you to be in control of the time that you’re spending.
What are your long-term health care plans? As people age, they often face declining health. This often means that older people need even more help with healthcare issues, and this can be an issue with cost. A good health plan will cover you at home and later, in a facility if need be.
Pension Plan
Figure out what kind of pension plans your employer has. If you find a traditional plan, be sure to research it thoroughly, especially the coverage that it offers. Before changing jobs, find out what happens to your pension plan. See if any benefits can be received from the previous employer. You might also be able to receive benefits from the pension plan of your spouse.
If you’re over 50, try making “catch up” contribution to the IRA. Usually you can see that there’s a limit of 5,500 dollars that you’re able to save in an IRA. When you are over 50, that limit increases to $17,500. This higher limit is great for people who start an IRA late, but want to save some serious money.
When planning for your retirement income needs, plan to live the lifestyle you currently do. If you do, you should be able to bank on expenses being approximately 80 percent of the current figures, considering that your work week will be significantly abbreviated. Just try to avoid spending too much extra cash in this new free time.
Social Security
Social Security is not something that you can rely on to live. Social Security will only pay you a portion of what you will need to live when you retire; the number is around 40 percent of what you make right now. Most folks will want at least 70 percent of what they made before retirement to have a comfortable life.
If you want to make your money go farther, and if you are recently retired, then you could think about downsizing. While your home may be paid off, you still have to pay to maintain a large property. Think about relocating to something just a bit smaller, like a townhouse or a property with less square footage. You can save a lot this way.
Of course you have what you need to get going, but you’re going to have to continue to learn and make adjustments. You are going to now be able to put away that retirement savings for later. You can enjoy your golden years, but if you don’t plan ahead, you may be in for a tough road.
