Many people never give their own retirement much of a thought. They expect others to have planned it for them, or decide that they will consider it at a later date. That can be hard to deal with at an old age, so read carefully.
Try to determine what your expenses will be like once you retire. Studies show that the average American requires at least 75 percent of their normal income to survive during retirement: that’s 75 percent of the salary that you are earning right now. If you make less money, you may need 90%.
Now that you have a lot of free time, you can get in excellent physical condition. You need strong bones and a strong cardiovascular system, both of which can develop through exercise. Take time to participate in regular workouts so that you can stay healthy and enjoy retirement for a long time.
Is retirement planning overwhelming you? While you may not be in the most advantageous position, you can still get the ball rolling now. Look at the finances you have and figure out what you need to get put away every month. A little will go a long way. A little bit of saving will go a long way in the future.
Understand the retirement plan at your company. If you have the option of a 401(k) plan, then be sure to register as soon as you can and start contributing. Learn about the plan, and how to contribute or take out money.
While saving as much as possible towards retirement is key, thinking about the types of investments to make is also important. Be sure that you avoid putting everything in one place; have a properly diversified portfolio. That minimizes your risk.
Postpone collecting Social Security if you are able to do so. Waiting means your allowance will go up. This is better accomplished if you have multiple sources of income.
Check on your retirement plans each quarter. Don’t give in to the temptation to do it more often; you don’t want to get too emotionally involved in smaller fluctuations of the market. Rebalancing less often means that you could miss out on good opportunities. Consult with retirement account specialist to figure out the best allocation plan for your funds.
Many people believe there is plenty of time to plan for retirement. Time can get away from us very quickly, however. Planning your daily activities in advance can make sure you are organized and properly utilize your time.
What are your long-term health care plans? Most people experience some decline in health as they get older. There are I times when this decline causes healthcare expenses to grow. If you have factored this into your plan, you’ll be well taken care of should the need arise.
Ask your employer about their pension plan. If it’s a traditional plan, find out if you’re covered and how it works. It is important that you understand the ramifications of changing jobs on your plan. You should also learn if you are eligible for any benefits from the previous employer after you leave. You might also qualify for pension benefits through your spouse’s plan.
If you happen to be over 50, you have the ability to make additional IRA contributions. Typically, the yearly limit for an IRA contribution is 5500.00. But once you hit 50 years old, you can raise that limit to 17,500 a year. This is ideal for those starting later than they wanted to, but still need to put away a lot of money.
Begin paying off loans prior to retiring. If you don’t have to pay a mortgage and car payments, your budget will be smaller. The less money you need to put out on basic bills, the more fun you can bring into your life.
Social Security
Social Security alone will not be sufficient for you to live on. Social Security may pay roughly 40 percent of household and other expenses, but that is clearly not enough. Most people require 70 percent (90 percent for low income) of their current pre-retirement salary to live comfortable after retirement.
If you want to make your money go farther, and if you are recently retired, then you could think about downsizing. Even if you no longer have a mortgage, there are still maintenance expenses like lawn maintenance, utilities, etc. It may be wise to move into a smaller house, condo or townhome. You can save a lot this way.
Take the time to enjoy yourself. It can be tough to navigate life as you get older, but that’s why you need to stop and make sure that you are doing something every day that speaks to your inner self. Look for new hobbies and other activities that make you happy.
Remember that you cannot completely rely upon Social Security to pay your way. Although it will help you out somewhat, for the majority of folks, it’s simply not enough to go around. Usually, Social Security will give you about 40 percent of what you earned when working, which probably is not going to be enough.
If you have kids, you probably have a college fund started for them. That is important, but you should plan out your retirement first. Your children’s education can be funded by loans, scholarships and work study. These may not be easily available after retirement, so try to always allocate your money wisely.
Make sure you plans for your golden years by establishing a reliable Power of Attorney. These things will make it to where people can make decisions for you if you’re unable to for some reason. It’s better to know who they are before anything bad happens.
Retirement can be an enjoyable period of life, but only if it is well planned in advance. How can you enjoy a comfortable retirement? Spend your time using these tips to start planning as soon as possible for retirement.