Retirement planning is not a popular topic of conversation. It may be because they find it uncomfortable or do not have plans. That said, it really doesn’t have to be this way. Investing some time to investigate retirement plans will pay off. This article is a great start for your future.
Determine how much money you will need to live once you retire. You need about 75% of your current income to live during retirement. Lower-income earners may need as much as 90 percent.
Reduce the amount of money that you spend on miscellaneous items throughout the week. Keep a list of the things that you must live with. This will give you more money to put towards your retirement plans.
Save early and watch your retirement savings grow. Even if you can only save a little, it’s important to do it now. As your income rises, your savings should to. An interest-bearing account will result in greater earnings, as your money will grow over time.
Match every contribution your employer makes with your 401k and make frequent contributions of your own. 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. If your employer happens to match your contribution, then that is just like them handing you free money.
With plenty of free time during your retirement, you have no more excuses for not getting into shape. At retirement age, it’s important to have muscles and bones that are in good shape. Exercise also helps your heart. A good retirement features regular exercise so that you can live life to the fullest.
Examine what your employer offers in the way of a retirement savings plan. If there is a 401k plan, sign up and start adding as much as possible. Learn everything there is to know about the plan, and don’t withdraw the money until you’re able to do so without penalty.
If possible, consider putting off tapping your Social Security benefits. This will increase the money that you get per month. This is a particularly good idea if you’re still working or have another source of income.
Check out the pension plans your employer provides. If there is a traditional one available, find out exactly how it works as well as if you are eligible. You should also know what happens to your plan if you change jobs. Hopefully, you will still be able to access certain benefits. You can actually get the benefits from your wife or husband’s plan.
Retirement is a great time to get a small business started if you think it has a chance at success. Some people become successful later in life by making their hobby a business. This is a pretty low-stress time of your life to do it since you don’t have to worry about how you’re going to pay everyday expenses.
If you’re over 50, try making “catch up” contribution to the IRA. There is usually a limit of $5,500 on the amount you are allowed to put back in your IRA yearly. When you’re over age 50, the limit goes up to $17,500. This is great for those that started late but wish to save a lot.
Find friends that are of the same age as you. This will help you fill your idle hours. You can hang out with them during the day when most people are working. You will also have a good support group that you can use when you need to.
Do not depend on Social Security to cover all of your living expenses. SS benefits only pay about 40 percent of the income your currently receive, and that will not cover the cost of your living. You actually require 70-80 percent of your salary, though, if you want to enjoy your time in retirement.
Grandchildren could be one of the best things about your retirement. You can take care of your grandchildren during this time. Try to have some time to have a fun time with your grandchildren, and you can plan to have activities that everyone will enjoy. However don’t overextend yourself by caring for children full time.
Leave your retirement savings alone, even when you hit a financial slump. That’s borrowing from your future, and you’ll lose valuable investments and interest. Also, you may have to pay withdrawal penalties when you take your money out as well as losing some tax benefits. Make a promise to yourself to not touch it until you reach retirement.
Health Insurance
Learn everything about Medicare and if it will affect your health insurance coverage. You may already have some health insurance, so make sure you understand how they will work together. By increasing your knowledge, you can help ensure you have the money needed to pay for your medical bills once you retire.
Retirement is a great time in your life usually. However, you must plan in advance. Use these ideas to come up with your own plan. Once you start planning, this will not seem as daunting to you.