How to Plan for Retirement
When do you plan to retire from working your day to day job or from your own venture in entrepreneurship? How much money do you need to retire comfortably? How much money do you have saved for retirement at this time? How much money do you need to retire? Everyone should have a retirement strategy plan and should be answering these questions.
When creating your retirement strategy plan there are many things to consider. Seeking professional advice is a great idea.
A few important factors to consider in planning for your retirement are as followed:
- How much money do you currently have saved for retirement?
- Do you currently have any retirement pension plans?
- How much money do you currently earn?
- How much money can you afford to put into savings
- At what age do you plan to retire?
If you don’t have anything saved up for your retirement, there is no time like starting your retirement savings today! Even if you have to start up saving in small amounts, create a savings account for retirement and do not dip into your retirement savings. Starting small creates the habit of saving each month for those that aren’t disciplined in saving money. As you can, progressively save in larger increments, this takes to your ideal retirement savings
If your employer offers a retirement savings plan, such as a 401(k) plan, contribute to this plan. Many employers that have a retirement savings plan will match your contribution from 3% to 6%. This is a great benefit to have. The amount you contribute isn’t taxable so you are saving taxes as well as saving for your retirement.
You may also consider basic investment principles. How you save can be just as important as how much you save. Make sure you learn about different investment options and ask questions before you decide which route to take. Put your savings in different types of investments, this can reduce risk and can help you maximize your return. Continue to monitor your options to get the best out of your retirement investment.
You may also put money into an Individual Retirement Account. Individual Retirement Account (IRA) allows you to deposit up to $5000 grand a year to go towards your retirement. As you become 50 years old or older, you are able to contribute even more. There are many tax advantages with IRA accounts and when you open an IRA, you have two options – a traditional IRA or a Roth IRA. Make sure you know the details of these options and open the correct IRA account for your needs.
Many of us have worked long enough to receive social security benefits; however, most of us have very little coming back to us to help make retirement comfortable. Each year a statement comes in the mail from the government showing what your earnings will be. Social Security benefits are on average equal to about 40 percent of what you earned before retirement.
You must know your retirement needs. Retirement is expensive and takes a lot of planning. Retirement advisors estimate that you will need approximately 70 percent of your pre-retirement income to be able to live the lifestyle you currently live without working. Talk to your employer, your bank, your union, or a financial adviser and ask many questions. Many of the options mentioned above have many variations and allow for setting yourself up for a successful retirement. .When asking questions make sure you understand the answers. Get practical advice and do so while you still can have a handle on it.