California Retirement Planning

Who wants to work forever? Even those who answer affirmatively to this question have some end goal in mind. Retirement is a goal that everyone hopes to reach one day. Everyday we learn more and more about how to save for retirement, so those in their 20s and 30s should be ready for retirement when their time rolls around. The information that is available for those who want to retire includes how to save for retirement, where to retire, and who to turn to for retirement services. California is a state that many retirees choose for retirement for a variety of reasons!

Saving Tips and Strategies

Many working-adults set up retirement savings plans such as the 401(k). The 401(k) plan is an effective way to retire if you contribute outside of the automatic payroll. However, you should not only wait for pay raises in work. You should also contribute to your retirement savings with small deposits you receive throughout the year. For example, if you receive a substantial tax refund, bonus, some holiday money, inheritance, or money from other avenues, then you could add that to your retirement savings. Of course, even if these are small deposits of $300 per year, they will add up. More than likely, you could add more than $1000 dollars to your retirement savings each year if you employ these tactics. This is money that you know you can live without because you do so on a daily basis. Any lot of extra money will be beneficial in the long run. Once you start saving this kind of money, you will look for ways to increase your savings each year.

If you do not have a 401(k) or do not wish to continue saving money with it, then you can easily set up an online savings account. If you can find an online savings account that does not require a minimum balance or transfer fees, then your money will earn a good amount of interest. Then, you could purchase a mutual fund or stocks. If you save enough money, you could purchase investments and accumulate even more money. There is a host of ways to invest. You could use bonds, the stock market, a savings account, real estate, mutual funds, fixed securities, commercial real estate. If you are planning to invest in any way, you need to invest plenty of time into research because every investment has its benefits and risks.

Some general tips for investing include spending your money wisely and setting priorities. Saving money does not have to put a strain on your lifestyle. You can save money and still enjoy the lifestyle that you want to live. For example, rather than eat out everyday, you can purchase a cookbook and cook at home several times a week. Then, with some of the money you save, you can eat an elegant dinner once a week or once a month. If you find that you want to eat out often, then you could order water instead of a $3 drink. If you eat out five days a week, that alone would save you $15 every week. As you can see, these small amounts of money can add up to large totals. You could put that $15 you save every week in an online savings account and over three months, you can save $180! These are small changes to your lifestyle that can make a big difference in your life over time.

Calculating Your Retirement Savings Needs

As important as saving money is for retirement, financial planning is just as important. Financial planning includes not only saving as much as possible, but how much you will need to save and the amount of time you will need that amount. Obviously, none of us can be sure about our life expectancy, but we need to be prepared through about 90 years old. In past years, it was believed that an individual should be able to live on about 70% of what they made pre-retirement. This was an adequate rule of thumb because taxes were much fewer. However, life spans have increased. Additionally, the economy is much less unstable than it was about thirty years ago. Medical rates, as just about everything else, are on the rise. Therefore, an individual almost needs to maintain their pre-retirement income level throughout retirement.

There are a couple of steps you can take to find an ordinal amount for retirement needs. First, you will need to multiply the amount that you anticipate receiving by way of annual income when you retire by the inflation factor. The inflation factor is 1.03 because the CPI (Consumer Price Index) inflation rate is currently 3%. This figure will show you how much you need in the first year of your retirement. You can repeat this for about 15 to 20 years using the previous year’s income total to see how much you will need to maintain your current you may receive. When you subtract this additional income from the figure you previously found, this lifestyle throughout retirement. If you plan on living more modestly in retirement, then you can use only a certain percentage of your income at retirement. Once again, this figure will give you the amount of money that you need to save. Next, you will need to consider Social Security, pensions, trust funds, and any other income remaining number will show you how much you need to save in order to retirement at your desired lifestyle.

These figures do not include debt, mortgage payments, car payments, or credit cards; therefore, you should also consider how to get rid of your debt by the time you retire. In fact, as soon as you decrease your debt, the more you will able to save for retirement. Think twice about opening another credit card if you have multiple cards maxed out. Consider 15 year loans for your home. You should also consider paying your car off as soon as possible. As already stated, to decrease your debt, you must first stop increasing your debt. Cut credit cards that are maxed out. Get rid of convenient credit cards for gas or shopping. Try to use only one credit card to purchase your necessities. As a last resort, you can consolidate your debt to reduce it in that manner.

Next, you need to be aware of everything you are spending. If you write everything down, then you may find it easier to avoid new debt. When you write everything down, you need to categorize it. You can have a list of “necessities”, “should haves”, and “wants”. An example of a necessity would be food or rent. “Should haves” may include gym membership or new clothes for an event or work. “Wants” are things such as magazine subscriptions, cable, and unnecessary features of your telephone or cellphone. Categorizing these items does not mean that you cannot have anything outside of “necessities”; instead, it means that you are strategic about when and how to purchase things outside of “necessities”. You can budget based on the categorized lists. Write down each expense regardless of whether you went over the budget. Writing these expenses will help you cut down on unnecessary purchases, which drive debt.

Why Retire in California?

California is one of the top states in the United States to retire. There are over five towns with great health care. Also, there is plenty to do when you retire in California. There is plenty of culture of all forms. There are historic museums, sporting venues, and entertainment of all sorts. California exhibits every type of weather from north to south. If you rejoin the cold weather, northern California has it! If you prefer warmer weather, mid and southern California will bring the heat! Typically, the summers in California and warm and dry, and winters are cooler and wet. The cost-of-living may be higher, but California generally keeps lower taxes. Many of the retirement communities in California have health care centers close by.

Popular Retirement Locations

San Diego is one of the most popular retirement destinations because the climate is ideal for older adults. The sun constantly shines, and the weather rarely yields to either extreme. With the San Diego Zoo, the city is a great location for grandchildren to visit. Furthermore, San Diego is a large city that can feel like a small city, depending on where you choose to live. San Diego is home to the Gaslamp Quarter, which is a historic district of shops, museums, and restaurants. It is also home to Mount Soledad, UC San Diego, Torrey Pines Golf Course, and Balboa Park. With local universities and the Navy, San Diego is one of the most diverse cities in the United States. It also has one of the world’s best harbors. This city has more than ten hospitals, the International Airport, and rail stations that stretch to Los Angeles.

Another great location in California for retirement is the city, Eureka. Eureka is a port city in northern California. It has a relatively small population and an older architecture. The older architecture, such as the Victorian homes, are great investments. Additionally, Eureka has one of the lowest cost-of-living in California. The city is very historic small town. It has been rated the best small art town in America.

Laguna Woods Village is a retirement resort in Laguna Woods, California. The retirement community is age-restricted. There are a variety of different housing styles in this resort. There are plenty of activities available at the resort including fitness, computer-learning center, pools, golf, art centers, and more. This community was rated the best retirement community in Orange County.

Well Known Retirement Planners in California

You can find more retirement planners in your area by looking in the Yellow Pages. However, here is a inconclusive list of retirement planners in Los Angeles, San Diego, and San Francisco.

  • The Los Angeles area has many retirement planning services such as the American Retirement Corporation, American Savings Financial Services, and American Express Financial Advisors.
  • In the San Diego area, you can look at American United Life and American Financial Strategies.
  • The San Francisco area has retirement planning services from American Safe Investment Incorporated, American Brokerage Network, and American Investors Co.

You should perform research about any retirement planning service that you are interested in pursuing. Retirement is much more fun when you have done the proper research and attain the savings that are necessary to live your desired lifestyle. You should start savings as soon as possible, and you should start with a desired amount in mind. Knocking out debt will ensure that you can save more money with the same income level. Finally, make sure that you look into retirement communities before you make a decision of where to locate. California offers many retirement areas with different amenities to offer. Perform your research because you will only find that ultimate happiness by knowing what will give you what you want.

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