Are your parents comfortably retired? If so, how did they plan for their future? Have you done things in a similar way to them? If you have not, you should begin your research now and use the following advice.
You need to figure out what exactly you think your retirement will cost you. Studies have shown that most Americans need about 75 percent of what they make in income to help them when they retire. That means 75 percent of what you’re earning at this time. If you make less money, you may need 90%.
Save continuously from the time you start working until the time you retire. Even if you need to being in a small way, start saving as soon as possible. As you receive work raises over time, you should be putting even more money into your retirement account. By putting your retirement money into an interest bearing savings account, your money will grow exponentially.
People who have worked long and hard eagerly anticipate a happy retirement. They think retirement is going to be a wonderful thing. This is partially true, but it requires thorough planning to live that kind of life.
Contribute to your 401k regularly and take full advantage of any employer match that is provided. 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. If the employer matches your contributions, they are basically giving you free money.
Do you feel overwhelmed due to lack of saving? You can always start now. Examine your current finances and determine how much you can save monthly. Don’t think it’s bad if you don’t have a lot. A little bit of saving will go a long way in the future.
You should diversify your investment options when saving for retirement. Keep a diverse portfolio and spread your risk around. That minimizes your risk.
Take your retirement portfolio and rebalance it quarterly. Doing so more frequently leaves you emotionally vulnerable during market swings. If you do not balance your portfolio often, you may be missing out on great opportunities. Consider hiring an investment professional. They can help you figure out how your money will be best allocated.
Work on downsizing while approaching retirement, as the money saved will come in handy. Even if you think everything is planned perfectly, life can happen. Large bills may come unexpectedly, where extra money could be vital.
Most workers believe that their retirement will have enough free time to do everything they want. Time certainly seems to slip by faster the more we age. Plan early so your time is wisely spent.
Set goals, both for the long and short term. This will help you to maximize your savings. If you plan out the amount you need, you will be aware of what to save. Try to have savings plans for the week, month and year.
Retirement might be the best time in your life. If there is something you enjoy doing, think about how you can make a profit from it. This can save you money and allow you to keep active.
If you are 50 years old, you can make additional contributions to your individual retirement account. Typically, you can save a maximum of $5500 annually in your IRA. However, after you are 50 years old, you can contribute a bit over 17 thousand. This higher limit is great for people who start an IRA late, but want to save some serious money.
Don’t think that Social Security benefits will cover the cost of living. SS benefits only pay about 40 percent of the income your currently receive, and that will not cover the cost of your living. 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.
Don’t touch your retirement savings no matter how difficult things get for you financially. If you do this then you’re going to lose out of principal and interest. There is an early withdrawal penalty for taking money out before you reach the age of 59-1/2, and you could forfeit some tax benefits, as well. Use it after you’ve retired.
Look into whether or not a hobby can make you some money. Maybe you like to do crafting and can sew, or maybe you’re a painter. Work on projects during the winter that you can sell at flea markets during the summer.
No matter how you have to do it, get out of any debt you owe before you stop working. You don’t want retirement to be stressful, but it can be if you’re still in debt. Therefore, get things in order prior to the time that you stop working.
Have your papers in a row, including your will and power of attorney. These things will make it to where people can make decisions for you if you’re unable to for some reason. The care of your house can properly be tended to as well.
Keep 10-15 percent of your income each year on the side for retirement. This foundation will ensure future stability. If you find that you are able to comfortably cover your monthly obligations, up the number from 10 to 15 percent.
The retirement world is different than what you parents have went through. You will need to stay informed and work towards it. What you have read here is only the beginning, so keep researching to find the best strategies for your own retirement. If you want to have a great life, you have to work for it!