Retirement Savings

Key to Retirement Savings = Planning

Retirement is one of the most important life decisions everyone makes at some point. Retirement can be a fun, adventurous time or a genuine struggle. The key to retirement happiness lies in planning. Many young adults do not focus on retirement but it may be a better choice to spend some time considering the future.

retirement savings

You need to know how the retired life will affect your lifestyle and how to live comfortably when you choose to retire. You should start planning for retirement, in a financial sense, very early in life because prior to getting married and starting a family, you will have more disposable income that can go toward retirement. Once you have a family, you will greater responsibilities and obligations.

Starting a private, retirement savings account as early in life as possible is a shrewd and often lucrative move to make.

PLANNING FOR RETIREMENT

Savings
A retirement savings account (preferably, not easily accessible) is a great way to ensure that you save money.  Even if you can only contribute twenty dollars a month to this account, over thirty years, you will have $7200. This may seem like a small amount, but this money could pay-off a car or start a college fund for your grandkids. This money could help finish a house payment or allow you to travel across Europe.

There are so many possibilities for your future if you are willing to consider to begin saving and planning for it today. If you are fifty years old and plan to retire in ten years, then you can put a hundred dollars in an account a month and let it grow. Over the course of ten years, you will have saved $12000.

It is not always easy to save money and balance everyday expenses, but it is crucial for you to save money now, for a more comfortable life later.

Housing Options
There are numerous options for housing once you retire. Some people choose to move to areas like Boca Raton, Florida, which are popular for their retirement homes and communities. You may choose to purchase a condo, townhouse, beach house, mountain home, or a second home somewhere.

  • Choose a home that can be easily maintained so you do not have a staff to help you maintain it.
  • Make sure that you can live comfortably without expensive remodeling or roof repairs.
  • Find a home that suits all of your needs and desires with a price that is not beyond your means.

If you already own a home, but want to purchase another one, you should consider renting your home. This is an additional source of income that can be hassle-free. You will probably want to interview prospects and perform background checks, but if you choose carefully this could be a major addition to your fixed income.

401K and Similar Options

A 401(k) is a retirement plan that is common to many state employees and others. This is designed to be a long term savings plan. If you start contributing in your twenties, you can conceivably save a million dollars by retirement.

You can pull your money out prior to 59, but you will incur a penalty. However, most plans will allow you to buy a home, finance hardships, and contribute to a college fund.This system works like a loan, but if you do not pay it back, you cannot withdraw anymore money until after you are 59.

The 401(k) allows you to purchase stocks and bonds. You may invest in environmental friendly, foreign, or any other company that you wish to support. Many employers will contribute or match what you contribute to the plan. This is great option for young people because the interest accumulates and the longer you invest, the more your money grows.

There can be risks in using the 401(k) investments when the stock market retracts, you will usually see a decline in your 401(k). However, you should remember that a 401(k) plan is a long term plan, so you will see increases as well as declines in the life of your 401(k).

There are a variety of plans and systems for the 401(k) that you can choose from. Other retirement programs work similar to the 401(k). Make sure you consult your employer or human resource officer to inquire about a retirement plan like the 401(k).

GETTING TO RETIREMENT

Living On A Fixed Budget
Part of being retired requires living on a fixed income. A fixed income can be tricky to overcome if you are not accustomed to doing so. Make sure that you create a budget that is flexible, yet strict. Do not overstep your budget.

Remember that retirement should be a fun time. Plan ahead and save so that retirement is a relaxing and fun experience.

One Response to Retirement Savings

  1. Life Ant says:

    Overall, great article on retirement savings. What’s not really discussed in this article is the out-of-pocket costs of health care in retirement. Various sources have projected that at at between $250,000-$500,000 per couple in assets required at at 65. That’s one of the big reasons why “85% of pre-retirement income” won’t be close to enough money for middle-class Americans. Medicare has an actuarial value of about 50% (i.e. it generally pays for about half of health care costs–in contrast to the 70%-80% more commonly seen in employer-sponsored coverage). If they got their way and Medicare went away, that number would essentially double to $500,000 to $1,000,000–a sum unreachable by all by the top 5%-10% of earners.

    The Boomers and current recipients of Medicare/Social Security are and will continue to be the most influential voting bloc in the US for the next several decades. Does any one actually believe these folk will volunteer to sleep on street corners or eat out of trash cans in retirement? The failure of the 401(k) experiment combined with the loss of defined benefit pensions means most of these folks (75 million+ and nearly all registered voters) will be wards of the state. Anyone who thinks programs like Medicare and Social Security are going to shrink is out of touch with reality. Tax rates will be going up–its just a question of how soon and by how much.

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