Retirement is something quite a few people want to get into when thinking of their careers. It is a time that you can put down your tools and office supplies and relax. It it will take some wise preparation to realize your plans. Review the following piece to get started.
Determine what your needs and expenses will be in retirement. 70% of your current income per year is a good ballpark figure to aim for. People who don’t earn that much right now will need closer to 90 percent.
Retirement is something that most people dream of. They have a notion that retirement is going to be a time of enjoyment and relaxation that opens up a lot more time for favorite pastimes. While this can be true, it will take careful planning if you want to have the retirement you have always dreamed of.
Do you worry because you have not begun planning or saving just yet? You always have time to start. Take a look at your spending. Determine how much you can afford to put back every month. It might not be much; that’s okay. Any money is better than no money, and the quicker you get things going, the more interest you’ll be in a position to earn.
Consider waiting two more years before drawing from Social Security. You will receive considerable more income per month if you put it off by a few years. This will be easier to do if you can still work, or if you have other sources of retirement income.
Work on downsizing while approaching retirement, as the money saved will come in handy. Sometimes things come up and you need more money than expected. Unexpected big expenses, such as medical bills, can crop up at any time, but they can be particularly problematic during retirement.
Check out the pension plans your employer provides. If you can locate a traditional pension, discover how it works as well as if it covers you. If you are going to switch jobs, find out the status of your current pension plan. See if your prior employer can provide you with benefits. Check to see if you are also eligible to receive benefits from the pension plan that your spouse has as well.
Set goals for the short term and the long term. This will help you to maximize your savings. Calculate how what you need so you can determine the proper amount to put into your savings account. Do the math and come up with the amount you need to save every week or every month.
Once your are past 50, you are allowed to make additional “catch up” payments to your IRA. Typically, there is a limit of $5,500 each year which can be contributed to an IRA. Once you’ve reached 50, though, the limit increases to about $17,500. You can start late yet still have lots saved.
When thinking about your retirement needs, figure that you’re going to keep your current lifestyle. If this is the case, you can expect to live on roughly 80 percent of your current income since you will not have some work-related expenses. Just try to avoid spending too much extra cash in this new free time.
You will want to be able to relax when you are retired. The tips from this article have taught you how to do just that. You must get started as soon as possible because retirement age comes around quickly. Work hard!
For more information on financial planning and retirement visit Virginia Estate and Retirement Planning Advisors, Inc.