Your retirement can be lots of fun. The key to it is proper planning. There are some great ideas to begin with in this article. Make sure to keep this page handy. Keep reading to figure out how to start your retirement planning. Investing your time now is an investment in your future.
75 Percent
Determine just how much money you will need in retirement. 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 are in a lower income range, this figure could rise to 90 percent.
Decrease what you spend on random items during the week. Make a list of your expenses to see what you can eliminate. The more you eliminate, the less you have to save.
Partial Retirement
Some people choose partial retirement. If you wish to retire but can’t afford to, partial retirement is an option. It involves working part-time in your current career. This gives you a combination of relaxation time while making a little extra cash. You can always take full retirement at a later date.
Make routine 401k contributions and maximize any available employer matching funds. When you put money in a 401K, then that money is taken out before taxes, which means less money will be taken from your paycheck in taxes. If the employer matches your contributions, they are basically giving you free money.
Use the extra time you have during retirement to increase your fitness level. You will really need to care for your body in retirement, because it’s important as you age. Working out should be part of your everyday life in retirement.
Consider waiting a few extra years to take advantage of Social Security income if you can afford to. Waiting will boost your eventual monthly take, helping ensure financial security later on. This is better accomplished if you have multiple sources of income.
Try to spend less so that you have more money. You might feel as though you have planned well, but life is full of surprises. Medical bills and other big expenses can catch you off guard at any stage in life, but they are particularly challenging during retirement.
Think about getting a health plan that’s for long term care. As people age, they often face declining health. In a lot of cases this decline means healthcare expenses that can cost a bit. Using a long-term healthcare plan can help your needs get met at home or at a facility if your health takes a turn for the worst.
When calculating the amount of money you need to retire, consider how you currently live. Since you will not be working any longer, it is safe to say you will need around 80 percent of your current income. Just know that you shouldn’t be spending money as a free time activity.
Try to pay off loans right away when retirement gets close. The auto and mortgage loans are simpler if you can pay large sums before you retire. Check out your options. You can better enjoy your golden years when you don’t owe any money.
Downsizing is a great way to stretch your income after retiring. Even if you don’t pay mortgage, there are other expenses the come with big homes. You can always move to a smaller place, such as a condo or townhouse. Downsizing can save you money, limit the maintenance costs and allow you the freedom to travel.
The extra time we all have during retirement is a big advantage to spending time with grand kids. Your children might appreciate the extra help. During those times, plan some activities that both you and your grand-kids will enjoy. But avoid becoming a full time baby sitter.
What will your income be once you retire? This includes interest from savings, benefits from the government and the pension plan from your employer. Your financial situation will be more secure when more sources of money are available. Consider other reliable income sources you could tap now that will contribute towards your retirement in the future.
Make sure you find ways to enjoy life. Many folks find growing older to be hard. That is a good reason to do things that fulfill you with purpose and make you happy. Take up hobbies you enjoy to fill each day with happiness.
Think about 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 need to pay back the money yourself. Your estate will be responsible for this after you pass away. You will have greater funds to live on this way.
Don’t just rely on SS benefits. Though it may be of some financial help, most people cannot live on just this income along nowadays. Social Security usually provides about 40 percent of what you’ve earned when you worked, which is most likely not enough.
Plan for retirement well before you mean to retire. Retirement isn’t just a lump sum of savings, it is more of a financial plan to protect you when you retire. Examine your current spending habits and determine whether or not you will be able to maintain them in retirement. Are you able to keep up the payments on your house? Will you be able to eat out as frequently? Plan for any adjustments to your lifestyle years before you need to implement them.
Spending a little time now will pay dividends later on. Keep the above tips in mind. Take advantage of everything that can help you. The more you prepare for retirement, the more you will enjoy it. Therefore, start your planning right now.