The retirement years can be truly wonderful, as long as you plan for them in a deliberate, strategic way. Knowing how to prepare yourself financially for retirement and understanding how to live in order to make your money last longer is essential. The tips that follow below can serve as a terrific starting point.
Start planning for your retirement in your 20s. By sitting down and planning out your retirement early in life, you can make sure that you have saved enough to make retirement enjoyable. Saving 10 percent of your income each month will help ensure you have enough income to live comfortably.
Try to start a savings account as young as possible to plan for retirement. Something with minimal risk and a high interest rate is best. The younger you start planning, the greater your opportunity will be to save. If you can begin to regularly contribute to savings in your 20s, you’ll be well on your way to a nice nest egg.
It is never too early to start saving and planning for your retirement. Even when you are starting small, just start. As your income increases, your savings should also increase. Placing your money in an interest bearing account will allow your money to grow over time resulting in greater earnings.
If you don’t know where to start saving for retirement, check with your employer. Many employers offer not only a 401k savings plan, but also contribute matching funds. Regardless of how much of your income you should save, save at least the amount to get the full match. Never leave free money on the table.
Retirement planning not only includes financial preparation, but also preserving your health. The retirement years can be filled with enjoyable activities if your body is still healthy. Make sure you can take advantage of those opportunities when you finally do retire by making sure to remain active and protect your health.
Work on downsizing while approaching retirement, as the money saved will come in handy. Sometimes things come up and you need more money than expected. Things like unexpected medical bills can throw a monkey wrench into even the best-laid plans.
Learn about the pension plans offered by your employer. Find out if you are covered and how it works. If you plan on changing jobs, find out what will happen to your current plan. It may be possible to get benefits from your last employer. You might also be able to tap into your spouse’s benefits through their pension plan.
You can automate your savings! Most things today can be automated and your retirement savings are the same way. Automated options help you make those investments when you just seem to forget. This will allow your nest egg to start growing without you wasting any time thinking about it. This is a great idea for any smart saver.
Set goals, both for the long and short term. Goals are as important for retirement as they are at any other time of life. Setting a target amount for savings will help you attain the amount you need. Some basic calculations will tell you what you need to know.
When you want to save money for retirement, make it a point to get a bank account set up that you cannot touch for any reason. This way, you’ll have something to use when you’re done working. Ask the bank you’re working with what kind of options they have in terms of savings accounts.
If you’re planning on taking advantage of a workplace retirement account, make sure you know how long it takes to be vested in the account. Some accounts will not allow you to keep your employer’s contributions unless you’ve been an employee for a set number of years. Know how long you’ll need to be working in order to maximize your payout in the end.
As you approach the age of retirement, find out about Medicare. This important part of life after working is something you need to know about now. There are deadlines for signing up and serious choices to be made. Be aware of your options and obligations now, to avoid missing out on necessary benefits later.
You should know that once you reach 50-years-old, you can add extra contributions into your IRA to try to catch up. There is usually a limit of $5,500 on the amount you are allowed to put back in your IRA yearly. Once you reach 50, however, the limit will be increased to about $17,500. This can be helpful to those who start saving late, but still wish to put back a lot for retirement.
Safeguard your savings. Instead of focusing on boosting wealth, try protecting what’s already there. The closer you get to retiring, the less of a good idea it is to take risks. There are too many downturns that could occur, especially with this last recession. If you are going to begin living off your portfolio, then you need to make sure it doesn’t lose value. After all, that is the income that you need to survive.
If you are establishing a retirement savings strategy and you lack financial discipline, it is wise to never have the amount you want set back to ever be in your wallet. Designate a specific percentage of your pretax income to be automatically deposited into an account such as a Roth IRA or a 401(k). The money will be automatically deducted from your paycheck and essentially takes the decision of whether you want to save or spend the money out of your control.
Be very certain that the funds that you’ve saved for retirement are vested by the time you are looking to retire. Sure all that money is earmarked for retirement, but there may be restrictions on when you can actually touch those funds. Removing them early could mean having to pay fees for touching the funds.
There is no doubt that countless folks look forward to retiring throughout their working lives. But, when the time actually arrives, the financial uncertainty can actually cause great strain. Fortunately, the information provided in the paragraphs above can serve as an ongoing reference that you can use to keep your head above water and really enjoy life after retirement.