People often think of retirement as long days lounging by the pool with a drink. This can be true for anyone’s retirement, but there is often a lot more than that to come with retirement. Here are some things that you will need to think about as you make your retirement plans.
Determine just how much money you will need in retirement. Most people will have to have about 75% of their regular income in order to maintain a reasonable standard of living. People who already receive a low income may need around 90%.
Don’t spend so much money on miscellaneous things when you’re going through your week. Make a budget and figure out what you can remove. This will give you more money to put towards your retirement plans.
Retirement is a time many dream about while they are working. It is their belief that retirement will afford them the opportunity to enjoy life and participate in activities for which they did not have time while they were working. In reality, your retirement plans need to start many years or decades before you actually retire.
Match every contribution your employer makes with your 401k and make frequent contributions of your own. 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 you have a plan that has your employer matching the contributions you make, it is basically free money.
Use the extra time you have during retirement to increase your fitness level. Healthy muscles and bones are crucial now, and your cardiovascular health could use the benefits of exercising. Try working out regularly. You may find that you like it more.
Do you feel overwhelmed due to lack of saving? While you may not be in the most advantageous position, you can still get the ball rolling now. Look at the finances you have and figure out what you need to get put away every month. If you can only save a little, don’t worry. Something is better than nothing, and the sooner you start putting money away, the more time it will have to yield an investment.
If it’s possible, you may even want to consider waiting a while before digging into your Social Security income. You will receive considerable more income per month if you put it off by a few years. It is simpler to accomplish this if you have a few options for making income.
Go over your retirement portfolio no less than once quarterly. Doing so more frequently leaves you emotionally vulnerable during market swings. You can also end up putting money into huge winners. Find an investment agent to help you.
Most people believe they will have all the time in the world to do things they always wanted to when they retire. However, time often passes more quickly than people realize. Planning in advance for daily activities can help to efficiently organize and utilize your time.
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. If you know about how much money you’ll need, then you know how much you need to save. Doing your calculations in advance will tell you how much you need to save.
Your IRA is a great place to invest “catch up” contributions when you hit 50 years old. IRAs typically have annual contribution limits of around $5,500. However, once you are over the age of 50, that limit is increased to around $17,500. This is great for people that started late but still need to save back some.
As you calculate your needs for future retirement, keep the same standard of living you provide yourself with now in mind. It is probably safe to estimate that your living expenses will be approximately 80 percent of your current expenses since you will not have to pay work-related expenses, such as wardrobe, transportation costs, etc. You just have to keep from spending additional monies during all the extra time you’re going to have.
Should you retire and need to save money, downsizing is a good idea. Even if you no longer have a mortgage, there are still maintenance expenses like lawn maintenance, utilities, etc. It may be wise to move into a smaller house, condo or townhome. You will save more money this way.
Plan fun activities. Many people find growing older to be a tough time. And that’s a good reason to do things that will fill you with a sense of purpose and make you happy during that time. Take up hobbies you enjoy to fill each day with happiness.
Reverse Mortgage
Think about getting a reverse mortgage. The reverse mortgage is one where you’re able to stay at home but get a loan out based on what the home’s equity is. You do not need to pay back the money yourself. Your estate will be responsible for this after you pass away. You can get extra money by doing this.
Now you know that retirement is more than just having a good time vacationing. One’s retirement can go terribly bad if they have not prepared themselves properly. Now that you have read this article, you should be well-prepared for this adventure in your life.
