Many people are looking forward towards retirement, however dread preparing for it financially. This is because of many reasons. But, you just have to remember that you need to plan for these things. You may wonder what information you are lacking. Continue reading to find out.
Consider how much your retirement costs and needs are going to be. You will need 75 percent of your current income to live comfortably. The less you make, the higher that percentage will be.
Many people are excited about retiring, especially when they’ve worked a long time. They expect to bask in all sorts of freedom. This can certainly be the case, but it does take hard work to get to this point.
Take a good look at your employer’s retirement plan. If they have something such as a 401k type of plan, get signed up and add whatever you’re able to. Research your plan carefully, what you can contribute and when you can access the money.
Wait as long as you can to take your Social Security income. By waiting, you will increase your monthly allowance, and this can make it easier to remain financially comfortable. It is simpler to accomplish this if you have a few options for making income.
What pension plan does your employer have? Find out if you are covered and how it works. If you’re changing jobs, look into whether you can keep your current plan or not. It may be possible to get benefits from your last employer. You might also be able to tap into your spouse’s benefits through their pension plan.
Retirement is a great time to start a small business. If there is something you enjoy doing, think about how you can make a profit from it. This part-time business is low stress because the owner does not need to depend on the income for their livelihood.
If you are 50 years old or greater, you can play catch up with your IRA account. You will have to abide by a limit that you can contribute. After age 50 that number goes up to approximately $17500. This can be helpful to those who start saving late, but still wish to put back a lot for retirement.
When planning for your retirement income needs, plan to live the lifestyle you currently do. You can probably get by on roughly 80% of your current income, since you won’t have normal work-related expenses. However, you must keep an eye on your expenditures. Since you will have more free time, you may be tempted to spend more as well.
Find a little group of people that are retired like you are. Finding a group of others that don’t work just like you will allow you to do enjoyable things with them. Retired friends will also want to do things that most people who are retirement age typically want to do. They can also provide you with support and advice.
Downsizing is a great way to stretch your income after retiring. Even without a mortgage, the bills may be higher than you can afford. It may be wise to move into a smaller house, condo or townhome. This saves quite a bit of money each month.
Retirement is the perfect time to spend time with grandchildren. Your kids may need help with daycare. Try spending time with the grand-kids by having fun and planning activities that you can all do. Just don’t agree to watch the kids all the time. You do need time to yourself.
It doesn’t matter what your situation is, don’t use your retirement savings before you are retired. If you take money out early, there’s a good chance you will lose interest. In addition, you may need to pay a penalty for early withdrawal, plus you will be losing tax benefits. Use this money only for your retirement.
Make sure you find ways to enjoy life. Find a group of people that you can do activities with. Pick up a favorite hobby and fill your days with fun things to do.
Learn everything about Medicare and if it will affect your health insurance coverage. If you already have insurance, you should learn how they will work together. If you completely understand how this works, then you are more likely to be fully covered.
Do not rely on your Social Security benefits only when you retire. Though it may be of some financial help, most people cannot live on just this income along nowadays. You can only count on around 40 percent of your working salary from Social Security, which will certainly be less than you will need.
If you have enjoyed a certain hobby for a long time, think about whether you can make money doing it. Perhaps you’re into painting, making things, or refinishing things. Work on projects during the winter that you can sell at flea markets during the summer.
Plan well for your retirement long before that time approaches. This is more than just saving money. Consider your total spending and whether that can be maintained after you retire. Can you afford to stay in your current home? Can you afford to eat out as you do now? If you answered some of these questions negatively, you still have time to make some adjustments in your retirement planning.
As you’ve read, retirement saving isn’t as hard as you thought. It does take some will power to save for retirement, but the good thing is that it will be worthwhile in the end. Keep the information you learned here in mind to have an easier time.
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