Planning for Retirement
Planning for retirement has a lot to do with saving money. The average American aged 40-60 has less than $100,000 saved for retirement and surveys have shown that $1.7 million is what is needed to retire comfortably. So, if that is what you want for your retirement, there are some things you can do that will help you plan and save.
Determine How Much Money You Will Need. The first thing you are going to want to do is to figure out how much money you will need. There are a few things you should take into consideration such as the projected increase of living expenses, how long you will likely be in retirement, and the type of lifestyle you want to lead during it. These are estimates and your true retirement needs may fall above or under.
Check SSI Benefits. Social security checks are a form of monthly income that is related to your pre-retirement income. For most retirees, the SSI check replaces 40% of their income. The average SSI check is about $1,543 per month. And if that is something you could live off of, then you might want to adjust your saving strategy.
Start Saving Soon. It is never too early to start saving for retirement. And there is never an amount too small to start saving either. If you are just starting in your career, you may not have too much to contribute. The important thing is that you put in what you can, but it is ideal if you eventually start increasing your contributions.
Join Employer’s Retirement Plan. Another thing you can do is look into your employer’s retirement savings plan, such as the 401(k). You want to join as soon as possible and contribute as much as you can. Your taxes will be lower, and your employer can contribute more to the fund. Joining your employer’s retirement plan helps you keep on track with saving as it is set up as an automatic deduction.
Do Not Touch Your Savings. Emergencies come up all the time. There is nothing you can do to control them. However, what you can control is how you react. You should not take from your retirement savings if you can help it. Withdrawing from your retirement fund may result in losing principal and interest, losing tax benefits, and having to pay withdrawal fees. It is advised to have a separate rainy-day fund to use for emergencies. And if you were to lose or switch jobs, do not withdraw but keep it invested in the old plan or move it over into your new employer’s plan.
You need to put in some of the work early on to have the retirement you have dreamt of. These are a few great ways to begin your retirement planning.
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We hope this information on planning for retirement is helpful to you.
If you have questions about your Medicare coverage, call Empower Brokerage today. Let us help with your Medicare questions so you can get back to the activities you enjoy the most. (888) 446-9157 or click here to get an INSTANT QUOTE
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