Most people in the United States don’t have a solid understanding of retirement planning. A recent study showed that only 36% of workers feel very confident that they will have enough money saved up to cover their costs during retirement. This lack of understanding can lead to a lot of problems down the road, as retirees often find themselves struggling to make ends meet.
What is retirement planning?
Simply put, retirement planning is the process of preparing for your retirement. This includes setting aside money to cover your living costs, figuring out how you’ll pay for healthcare, and planning how you will spend your time once you stop working. Retirement planning can seem overwhelming at times, sometimes even a little scary. No matter what age you are, you are never too early to plan ahead!
Why is it important to plan your retirement?
One of the most important reasons to plan for your retirement is so that you can be sure you have enough money saved up to cover your costs. In the recent census, out of 47.8 million Americans aged 65 and older, seniors held an average income of $38,515 dollars annually with average net worth of $170,516. It also showed, the current average age for retirement is 66 with Americans living an average of 78.7 years.
Retirement can be expensive, especially if you plan to travel or live in a luxurious home. Miscellaneous and unexpected costs can put a retiree’s plans into jeopardy. By planning ahead, you can make sure that you have enough money set aside to enjoy your retirement without feeling the pressures of financial burden.
One of the most important things you can do when planning for retirement is to start early. The earlier you start, the more time you have to save and invest.
Here are a few key things to think about when you’re planning for retirement:
Determine your plan?
Planning your retirement goals is essential to understand what to budget and how to obtain your retirement goals! What age do you wish to retire? Do you want to travel? And how often? Will you need to make any major purchases? Like purchasing a new house or RV, maybe a vacation home or dream car? Prices will fluctuate so overbudgeting is crucial. Do you want to move? Being closer to family or downsizing is imperative.
Creating a budget and a plan to achieve these goals would be the next critical steps.
Consider working with a Financial Planner
When it comes to retirement planning, working with a financial planner can be extremely beneficial. Financial planners can help you figure out how much money you will need to save each month in order to have a comfortable retirement. They can also help you invest your money in a way that will provide you with the best return.
How to save towards your retirement?
Save, save, save!
One of the most important aspects of retirement planning is saving money. It may be difficult to do, but it’s important to try to save as much money as possible. You will need this money to cover your living costs during retirement.
- The best way to prepare for your retirement is to contribute money into a 401K or establish an IRA, both of which are excellent methods to set aside money for your golden years. These systems are especially beneficial since they provide tax benefits and are dedicated tools for putting money away for retirement planning. Begin early! The greatest approach to enjoy a fully funded retirement
- The Employer Match is an excellent strategy to improve your retirement plan. It’s essentially free money, so don’t leave it on the table!
- If you’re 50 or older, participating in catch-up contributions may be a fantastic method to speedily increase the amount of money in your 401K or IRA.
- Set savings goals and make automatic transfer to your savings account so that you can live comfortably for the rest of your life
- Inflation is a certainty, so make sure you have enough cash set aside for it.
- Budget for Costs: Healthcare, Medical Expenses, Housing and Mortgages, Taxes, Food, Emergencies, Entertainment and Travel are 10 Items you should always include in the budget.
We hope you’ve found these tips helpful and informative. Retirement planning can seem daunting, but it doesn’t have to be. If you start early and plan ahead, you can expect a more financially secure retirement with plenty of opportunities for fun and enjoyment. For more information on retirement planning, check out our other articles on Senior Living! Thanks for reading.