Prepping for Your Future: How to Plan for Retirement

Prepping for Your Future: How to Plan for Retirement
  • Opening Intro -

    Did you know that the average person will be retired for 20 years?

    That means that you need to have enough savings to provide you with 20 years worth of income.

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Sadly, most people don’t save enough for retirement. Some of the people who do save for retirement do not anticipate that they would have to live for so long without a job. Here are 10 tips that you can use to plan for retirement.

1. Start Saving Today

The earlier that you start saving, the more you can get from compound interest. You don’t need to start saving a radical amount of money right away.

The key is to be consistent. Aim to take 10% of your money and put it into a retirement account. If you can do this over the course of 20 years, you will be well-positioned to have an enjoyable retirement.

2. Know Your Retirement Needs

You will want to have about 70% to 90% of your income when you are in retirement. Use this guideline to tell you how much you need for retirement. For instance, if you have a salary of $60,000 per year. Then you will want to have enough to live on at least $42,000 per year.

3. Contribute to Your Employer’s Retirement Plan

Did you know that your employer can match your retirement contribution? Your employers’ retirement plan is a great way to boost your savings for retirement. Also, the automatic deductions from your paycheck will make it easier for you to save.

4. Learn About Your Employer’s Pension Plan

If your employer has a pension plan, then you will want to know everything about it. Ask about the benefits plan and what would happen if you change jobs. You can also talk to a financial planner about expert pensions.

5. Look at Basic Investment Principals

You will want to invest your retirement money. In order to get the best return on your investment, you should know where to invest and what kind of returns to expect. One of the most recommended retirement investment strategies is to use a low-cost mutual fund that tracks the S&P 500 index. Historically, this index returns about 9.8% per year.

6. Don’t Touch Your Retirement Savings

There will be times in your life that you may be crunched for money. However, you do not want to touch your retirement money. This is the money that you will need to live on when you are tired. Therefore, you should make it astrict rule to never touch that money until you retire.

7. Ask Your Employer to Start a Retirement Plan

If your employer does not have a retirement plan, ask him or her to start one. There are many retirement plans available and setting one up is simple for both the employee and the employer.

8. Put Money Into an Individual Retirement Account

You can put up to $6,000 per year in an individual retirement account. The contributions to this account are tax-deductible. Also, the capital gains from investments are tax-deferred.

9. Learn about Your Social Security Benefits

You may not know this, but you are already contributing to a retirement plan. The Social Security program is here to pay you benefits when you reach retirement age.

However, the payments that you will get from Social Security will not give you the 70% to 90% income goal that you will want to reach. However, you will still want to know more about your Social Security program. You can learn more on the Social Security website.

other valuable tips:

10. Ask Questions

Your retirement is going to last a significant part of your life. Therefore, you will want to know everything critical when it comes to saving for retirement, tax advantages and compound interest. Take the time now to ask questions to be better prepared for retirement.

Enjoying Your Retirement Years in Comfort

Retirement can be a time when you can relax and enjoy a new hobby or simply have a good time. Therefore, you want to make sure that you have the money that you need so bills don’t become a worry at this time. By following the right retirement steps, you will be positioned to enjoy life after your working career.

Image Credit: plan for retirement by Pixabay

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Categories: Retirement Planning

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