Planning for retirement can never be started too early. Granted, you don’t know what the economy will be like at that time, especially if you are in your early years of working. However, you can make a generalized guess as to what you would like to do during your retirement and how much money you think it may cost. Experts estimate that you will need to have seventy to ninety percent of your current yearly income to maintain the same quality of life you now have. This is a good figure you can use to start planning. The average person also spends about 15 to 20 years in retirement. With this basic knowledge, you can start retirement planning.
If your employer offers a retirement plan, start contributing to it as soon as possible. This not only helps you save, but it also lowers your taxes. Many employers kick in some, and over the years, the interest can really add up. If you don’t have a retirement program where you work, start putting a specific amount in savings automatically every payday. Should you eventually have a position where a retirement plan is available, you can adjust where the money goes. Please don’t touch your retirement savings unless it is the absolute last resort.
If you want to start investing, you may need help from a financial advisor. Start small and make sure you invest in a wide variety of areas. Try to anticipate where the future is heading in different industries and determine whether you can reasonably anticipate growth in those areas. Over the years, you will most likely have to make adjustments to these investments, but starting now gives you the best options.
Know Your Social Security
The Social Security Administration can help you estimate what kind of income you can expect when you retire based on your current income. This can change over time, but it will give you a rough estimate. Social Security is normally only a small portion of what you can count on when planning for retirement, but knowing what to expect can help you know how much you need to look into saving.
Put Money in an IRA
You can put in as much as $6000 a year and even more if you have already reached the age of 50. This makes an easy way to save, and it can save you money on taxes, depending on the type of IRA you choose. Most of these accounts can be set up to remove money from your checking or savings account automatically, so you will easily plan for it. Retirement planning doesn’t get much easier than that.
Hire an Estate Planner
Estate planners know all the hidden ways you can increase your savings for retirement. They can also advise things like investments and how to manage taxes in various situations of retirement planning. With a full-service estate planner, you can expect to get help not only with savings but with things like owning property and life insurance matters.
Talk With Your Employer
Find out if your employer offers a pension plan and if you are covered by it. Make sure you do whatever is necessary to remain eligible. If your employer doesn’t offer any type of retirement plan, discuss the possibility of one being started for your benefit and the benefit of your coworkers.
Never stop asking questions until you thoroughly understand a subject. If you aren’t sure how an IRA works, ask the bank, and don’t stop until you do understand. This goes for your employer, the SSA, and even your estate planner. This is your future we are discussing.
At SeniorSmart, our goal is to ensure that you have the answers you need to go into the future with confidence. Therefore, if you or your loved one have any questions about planning for your retirement in Birmingham, Alabama, please reach out to our team online or by calling 833.303.0983.