Retirement is a dream many hold. Retirement is when you should have time to put your feet up and relax. But, a great retirement won’t happen at all without planning for it properly early on. Read the article below to learn how to get started.

You need to figure out what exactly you think your retirement will cost you. 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. Lower-income earners may need as much as 90 percent.

TIP! Find out what your expenses are. It has been proven that most folks needs at least 3/4 of their current income to enjoy a comfortable retirement.

Start cutting back on miscellaneous and extraneous expenses throughout the week. Make sure to fully list out everything that you spend on now, and be strong enough to decrease the amount of things you don’t really need to spend on. Over a number of years these things can cost you a lot and that’s why getting rid of them can help you out.

Long years at work make retirement seem great. They expect to bask in all sorts of freedom. Planning for retirement is essential to make it work favorably.

Make sure that you make a contribution from every one of your paychecks to your 401(k) plan. If your employer matches your contributions, pay as much as you can into it. This allows you to avoid some of the taxes that you will face in the future. If you work for someone who matches each contribution you make, that’s pretty much free money in your pocket.

TIP! Every week, look for ways to cut back on miscellaneous expenses. Have a look at each of your expenses and then decide from there which ones are not necessary.

Since this will have more time on your hands, you should be able to improve your fitness. At retirement age, it’s important to have muscles and bones that are in good shape. Exercise also helps your heart. Work out daily and have fun!

Examine your existing savings plan for retirement. Sign up for plans like 401(k) and plan as well as you can. Be sure you understand everything there is to know about your retirement plan.

While you know you should save quite a bit of money to retire with, you also should be sure that you consider the kinds of investments that need to be made. Diversify your portfolio and make sure that you do not put all your eggs in one basket. You will be safer that way.

TIP! Many people are excited about retiring, especially when they’ve worked a long time. People think retirement is going to be a dream come true.

Consider waiting two more years before drawing from Social Security. You will receive considerable more income per month if you put it off by a few years. If you can still work some during retirement or you have other fund sources to pull from, retirement will be easier.

Consider opting into a health plan for the long haul. Most people experience some decline in health as they get older. Long term health care is very expensive. Make sure that you take care of your body at all times.

You want to set goals that will cover both the short-term and the long-term, too. You need goals in order to save money and for making important life decisions. Setting a target amount for savings will help you attain the amount you need. A little math will provide you with small weekly or monthly saving goals.

TIP! Partial retirement is a great option. If you do not have adequate funds to fully retire, consider moving to a part time position.

You should pay off your debts before you consider retirement. You will have an easier time with your car and house payments if you get them paid in large measure before you truly retire. With fewer financial obligations during your golden years, it will be easier to enjoy your free time.

Income Sources

What sort of income will you have when you’re retired? That includes your government benefits, employer pension plan and savings interest income. Having various income sources will ensure a steady income stream during retirement. Consider whether there are other income sources you could create at this time to contribute to your retirement.

TIP! Make sure that you are adding to your 401k every paycheck. A 401(k) plan gives anyone the ability to save more pre-tax dollars, so that you can actually put away more, without feeling so much sting from doing so with each paycheck.

Educate yourself on Medicare and its benefits. You may want to have supplemental insurance during retirement, and you need to know how this will work with Medicare. Knowledge of how those plans will synch makes it more likely that you will have the coverage you need.

Pay off your debt well before retirement. Retirement allows you to relax only if you have no debts stressing you out. Reduce all of your expenses to stay as happy as possible.

You may have money tied into your children’s college fund. While this is important, it is not as important as your retirement funding. Your children may have the option of taking out a loan, getting a scholarship or engaging in a work study opportunity. These things will be different when you retire so you should spend your money wisely.

TIP! Exercise is a great way to spend some of your time each day. You need strong bones and a strong cardiovascular system, both of which can develop through exercise.

Decide on who will be your Power of Attorney when you get older. This person can make medical decisions if you can’t. Naming someone as a power of attorney gives them the power to pay bills and even take care of things for your home which can help save you from any financial devastation.

Planning for retirement begins long before the retirement date. This means more than just saving some money. Consider your total spending and if you can keep that kind of lifestyle going in retirement. Can you afford your current home? Can you shop as much or eat at restaurants later? If you can not, then you need to make some adjustments to your lifestyle.

Save 10 to 15 percent of your take home pay each month. You don’t want to do less if you can afford to do this amount; this is the ideal base to start with. If you find that you are able to comfortably cover your monthly obligations, up the number from 10 to 15 percent.

TIP! Is retirement planning overwhelming you? You can always start now. Review your finances, and start socking away everything you can.

Try creating retirement goals before retiring. Figure out what activities you would most enjoy. You’ll have plenty of time to do things. What you wish to do when you’re older can affect the amount you need when retiring so that you can afford everything.

You can have fun and enjoy your retirement years. The tips you just read can help you turn that wish into a reality. Remember to start planning now or your retirement years will be here sooner than you think. Have fun and enjoy!