Are you ready to retire? Perhaps you are so young that you think that’s not necessary to think about right now. The more planning you put into your retirement, the greater payoff you will receive. There are even those who retire early. Think about what your possibilities are as you peruse the information that lies ahead.
What will your expenses be post-retirement? 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 are making very little, you’ll need 90% or more.
Start your saving early, and continue it until you retire. It does not matter if the amount is small; you should save today. As your income rises, so should your savings. The money you earn in interest will increase the amount available to you later, which can go a long way in retirement.
Match every contribution your employer makes with your 401k and make frequent contributions of your own. This allows you to avoid some of the taxes that you will face in the future. With an employer match, you are basically getting free money.
You may be feeling overwhelmed since you haven’t even begun to save. You can always start now. Look at your budget and decide on how much money you can save monthly. Don’t fret if it is not a lot. Having something trumps having nothing, and by starting now, you can build a surprising amount.
Examine your existing savings plan for retirement. If you have the option of a 401(k) plan, then be sure to register as soon as you can and start contributing. Read all of the detail regarding it before you make a decision.
If possible, delay the receipt of your Social Security income. This will increase the amount of money you will draw each month. Working part time or gaining money from other resources makes this more feasible.
When you are about to retire, downsize. You can use this money in the future. The best laid plans can often be interrupted by life’s surprises. You may run into some unexpected financial challenge.
Pension Plan
What pension plan does your employer have? If your employer offers a traditional pension plan, find out how it works. If you are going to switch jobs, find out the status of your current pension plan. You should also learn if you are eligible for any benefits from the previous employer after you leave. Your spouse’s pension might provide you with benefits.
Make sure to have both short and longer term goals. Goals are as important for retirement as they are at any other time of life. If you plan out the amount you need, you will be aware of what to save. Some basic calculations will tell you what you need to know.
You should know that once you reach 50-years-old, you can add extra contributions into your IRA to try to catch up. Generally speaking, the IRA limit is $5,500. If you are older 50, that limit will triple. This benefits those who may not have put away funds in their earlier years.
Try finding some friends that are retired. This can be one great time waster to fill in the spare hours you have in your day. You can hang out with them during the day when most people are working. It also supplies you with a support group on which you can rely when the need arises.
As you near retirement, start paying off your loans. 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.
Social Security
Do not depend on Social Security to cover your cost of living. While your Social Security benefits will pay for about 40 percent of what you make now when you retire, it’s not going to match your living costs. Most folks will want at least 70 percent of what they made before retirement to have a comfortable life.
What are your retirement plans? Are you planning on an extravagant lifestyle? Or will it be a more frugal one? Either choice is a great one when you’re a worker, but you have to be sure that you’re ready to retire. Follow the tips presented here to retire successfully and on time.