Have your parents reached their retirement goals? If they are, how did they get there? Are you going to follow in their footsteps? If you haven’t, you ought to begin studying up on retirement by reviewing the information below.
Current Income
You must take time to think about what funds you will need during your retirement years. It has been proven that most folks needs at least 3/4 of their current income to enjoy a comfortable retirement. People who make very little money should anticipate needing at least 85 percent of their current income to live well during retirement.
Save continuously from the time you start working until the time you retire. Even if it is only a small amount, start your savings today. When you make more money, you can increase the amount you save. When your money resides in an account that pays interest, your money has the chance to grow to provide you with extra money later on.
Contribute at least as much to your 401K as your employer will match. A 401k permits savings of pre-tax funds, thus allowing you to accumulate more money. With matching employer contributions, you are basically giving yourself a raise by saving.
Exercise is a great way to spend some of your time each day. This is important to reduce the health expenses that you will pay. You will enjoy your retirement more if you are physically fit.
Explore your employer’s retirement program. If they offer something, like a 401k, take advantage of it. Research your plan carefully, what you can contribute and when you can access the money.
It’s always important to save, but you need to also be thinking about the investments you should be making. Try not to put all of your eggs into one basket. Diversify your portfolio. This will reduce the risk significantly.
Check on your retirement plans each quarter. If you do it to often then you may be falling prey to an over-involvement in minor market swings. Rebalancing less often means that you could miss out on good opportunities. Work with a professional investor to figure out the best allocations for the money.
When you determine what you need for retirement, think about living a lifestyle to the one you currently have. 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. Make certain that you do not dive into your savings too quickly once you retire.
Remember that Social Security payments will not cover all your living expenses. These benefits cover less than half of your current earnings. Most people need at least 70 percent of the pre-retirement income for a comfortable retirement, and that is 90 percent for those with low income.
Should you retire and need to save money, downsizing is a good idea. Even if you do not have a mortgage, you still have the expenses that come with maintaining a big house such as electricity, landscaping, etc. Consider moving to a smaller home, townhouse or condo. You will save more money this way.
When you retire, you may want to spend time with your grandkids. Your children may need help occasionally with child care. Make this time special by planning activities that both you and the grandchildren will enjoy. That said, don’t become a daycare if you don’t want to be.
No matter how much you might think you need the money, never dip into the money you’ve already set aside for retirement before you’ve actually reached that point. You can lose a lot of money if you do so. In addition, you may need to pay a penalty for early withdrawal, plus you will be losing tax benefits. Don’t use the retirement money until you retired.
Think about getting a reverse mortgage. This allows you to stay in your house, but you can get a loan that’s based on its equity. You do not it repay the loan, buy rather the funds are taken from the estate once you die. This can be a great way to get some extra funds if you need them.
Try learning how Medicare works with your health insurance. You could already have insurance and not all insurance plans work well together. This knowledge will keep you covered if a medical situation arises.
If you have any favorite hobbies that you participate in, take a look to see if any of them will help you to earn some much-needed extra money. Do you enjoy creative endeavors like woodworking or painting? Enjoy preparing these projects during the colder months, then make them available to the buying public at craft shows or flea markets once the warm weather returns.
You will encounter a different world than your parents did. You need to stay current with how to make your retirement the best it can be. This article should have helped you start to formulate some goals and plans, but don’t stop here. Start planning your retirement today.