People tend not to focus on saving for retirement. They think they can just wait until they’re ready to retire to think about it, or they think their employer is going to take care of it. This is not really true, though, and can be a very unpleasant awakening at retirement age. Follow these tips for successful retirement planning.
You need to figure out what exactly you think your retirement will cost you. It has been proven that most folks needs at least 3/4 of their current income to enjoy a comfortable retirement. Workers that don’t make too much as it is may need about 90 percent or so.
After working for decades, retirement is seen as a welcome relief by many. 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. This can certainly be the case, but it does take hard work to get to this point.
Regularly contribute to your 401K plan to maximize its earnings. You can put money into your 401k before taxes, allowing you to save more. If your employer happens to match your contribution, then that is just like them handing you free money.
Stay in shape and keep healthy! Your entire body will benefit from regular exercise. Working out should be part of your everyday life in retirement.
Take a good look at your employer’s retirement plan. It’s a smart move to take advantage of 401(k) plans and anything else they can offer you for retirement purposes. Figure out what you can about the plan you choose like how much money it will cost you and how much time you have to stay to get your money.
You should save as much as you can for your retirement, but you should also learn how to invest that money wisely to maximize returns. Try not to put all of your eggs into one basket. Diversify your portfolio. This will keep your portfolio very strong.
Rebalance your retirement portfolio on a quarterly basis. This can prevent huge losses in the future. Less frequently may cause you to miss some opportunities. Hire someone knowledgeable in the field to assist you.
Try downsizing as you enter retirement, because the money you can save could be really meaningful later on. You may be saving, but anything can happen between now and retirement time, and you need as much money as possible! Medical bills and other big expenses can catch you off guard at any stage in life, but they are particularly challenging during retirement.
Are you ambitious? Your retirement years may be the right time to finally begin a small business. Many people have success during later years by operating a business from home. This part-time business is low stress because the owner does not need to depend on the income for their livelihood.
If you are 50 or older you can contribute “catch up” money to the IRA account you have. Typically, there is a limit of $5,500 each year which can be contributed to an IRA. But once you hit 50 years old, you can raise that limit to 17,500 a year. This is ideal for those starting later than they wanted to, but still need to put away a lot of money.
When you determine what you need for retirement, think about living a lifestyle to the one you currently have. Estimate that you will need about 80% of your current income each year you are retired. Make certain that you do not dive into your savings too quickly once you retire.
Your retirement years are perfect for spending time with your grandchildren. You can take care of your grandchildren during this time. During those times, plan some activities that both you and your grand-kids will enjoy. But try to not exhaust yourself by providing childcare full time.
What kind of income do you have for when you retire? Do you understand what benefits you will be entitled to and what income you can depend on? Security comes with multiple income streams. Are there any places right now that you could get to working for you that will help you when you’re retired?
Always make sure you are enjoying yourself. Life gets hard as you age, but you should take all possible steps to make it more enjoyable. Fill your days with happiness by doing hobbies you have enjoyed for many years.
If you’re a parent with a child who will go to school one day, chances are you’ve done a little preparation for that. Your retirement savings are just as important. There are school loans, grants and scholarships for your children’s schooling, and millions of young people have no problem going to school with that help alone. You won’t be able to do these things post-retirement, so consider them now.
Put away at least 10% of your income per year. You don’t want to do less if you can afford to do this amount; this is the ideal base to start with. As your income increases, increase the amount of money you save each month.
Create goals before you retire. Think about what it is that you desire when you’re not working anymore. You are going to have plenty of free time. How will you be able to pay for your leisure activities?
Retirement can be very relaxing, provided sufficient preparation has occurred. Are you working towards an enjoyable retirement? You have done a good thing by reading this great article, so use what you’ve learned here to help you with your retirement.
