Retirement may seem like a long way off now, but the fact of the matter is that the earlier you start saving and preparing – the better off you are going to be when retirement does come calling. The number of people who get caught out nearing retirement age and realizing that they haven’t got enough savings is incredibly high, and this is obviously very stressful for the retiree and their family members.
One of the first things to do is to find a solicitor that you can trust, who can give you financial advice and help you out should you encounter any financial difficulties. These could come in the form of work disputes, injury, medical or even government benefit issues, in which case you will need benefits and allowances solicitors to give you advice.
Here are some top tips to help you start saving for your retirement:
Know exactly when you are going to retire and how much you will need
Many people make the mistake of failing to properly plan for the day that their retirement comes around. While you are young and have a full-time job, you need to set an age in which you want to retire and then you can work towards that goal. Expenditure during retirement is grossly underestimated and you need to work out to live on around at least 70% of your current income to maintain your lifestyle when you retire.
401(k) is incredibly important
It has been noticed over the last few years that around 30% of individuals who have the option of a 401(k) decided not to participate. If your company offers this, or some other sort of retirement planning then you are advised to take advantage of it. It means less tax and your company is likely to match you with whatever you put in – which is free money essentially. Don’t think that these are olden day plans – if you have the option – take part in it.
Individual retirement plans
On top of any company-based retirement policies that you are contributing too, having an IRA is an added benefit and an easy way to start saving money. You can put anything up to $5,500 a year until you are 50 and then your limit will be upped. If you manage to put this amount in every year and your money earns a yearly 7% then after just 25 years you will have saved $347,870.
Estimate your social security benefits
Social security will pay you on average around 40% of what you were earning before you retired, and it is important to factor this money in when planning the amount you will be able to spend in your retirement. If you want to work it out exactly then using the calculator of the Social Security Administration is the best way to get your estimation.
You don’t want to get caught out as you approach retirement and these are just a few of the things that you can do that will make the transition from fully employed to retired just a little bit easier.
