Planning For The Retirement Years
In terms of putting enough money away for retirement, there are parallels to be drawn with watching your diet and exercise regimen. Everyone knows it is important, but not everyone follows through with what is required to succeed. Everyone offers up the seemingly valid reasons for procrastinating, but no matter your age, there really is no time to waste in terms of getting on a sound financial path. Even if you are late to the game, now is the moment to begin.
Tips for Saving Money
Even if you lack a clear path to building substantial savings, taking an affirmative first step mentally is key. The truth is that you may have to start on a smaller scale and work your way up to put away more and more on a monthly basis.
The U.S. Department of Labor estimates that the true amount of money required for retirement will depend on a number of things, such as present age and proximity to retirement itself. A smart way to think about it is to remember that you will want roughly 70 percent or more of your pre-retirement take-home pay to have a comfortable retirement if you make at least $100k annually, or 90 percent of that if you make less than that amount.
Smart Investments for Your Retirement
If you work for a firm that provides access to a 401(k) plan, make sure to sign up for it and make maximum allowable contributions. If you do not work for such a company or happen to be self-employed, there are two other great methods for saving, namely the traditional IRA and the Roth version.
Each permits a contribution maxing out at $5,000 annually, and even more if you are already 50 or older. Both offer tax-advantaged status as well. But, only contributions to a traditional IRA account can be deducted for tax purposes.
Using Your Resources
It may seem daunting enough to decide the right way to build retirement savings and the proper amount to have, but it an often be just as difficult to know the proper way to spend those funds. Making a sound budget for your retirement years can make things a little easier. Understanding your fixed monthly expenses ahead of time will help ascertain the right amount to have on hand. After you are confident that you’ll have enough to cover basic, recurring expenses, you will have the freedom to spend money on fun things such as vacations and hobbies.
Ultimately, by promptly beginning the process of financial analysis and saving necessary for a comfortable retirement, you can start planning the life you wish to live once the burdens of the daily grind are far behind you.