When do you plan to retire? With life expectancy rates becoming higher every decade, and now resting at 79 for men and 83 for women in America, it is likely that you will have many retirement years to fund. It is something that many people do worry about. They may be fine now with a steady income coming in, but what about when that stops? Will they be able to cover all the bills? Will they still owe on their homes? It can be a big problem. Here are some great ways to make sure you have enough money for retirement so that you can quit work (at least full time) and enjoy yourself in your old age.
Save 10 Times Your Salary
If you are able to save ten times your annual salary for your retirement, then you should be able to cover all eventualities. It sounds like a lot, but if you think that it’s about 15 percent of your yearly income, it’s a little easier to manage. Open up a deposit account and put the money in there as soon as you get paid each month or week. If you can put it into a high yield investment account that could mean that you finish with a profit, but remember that these investments can lose money as well as make it, so if you want to be completely safe just put the money into a standard account. It’s a good idea to use an account that imposes some kind of penalty for taking money out. It will make you think twice about using those funds for anything other than retirement (although of course, if it is an emergency, using them makes sense as long as you can top them up again before your retirement commences).
Know What Retirement Means For You
Understanding what you mean by retirement is also essential. For some people, that means stopping work entirely. For others, it means slowing down, but still working in a part-time capacity. Still, others look at retirement as a chance to have a sabbatical but then go back to work full time. Depending on which option you are planning, you’ll need either more or less retirement money in the pot. It should be a decision you make as soon as possible because it will make a big difference to how much you should put to one side.
Give Up The Bad Things
There are certain things that we all do that are bad for us, and we know they are bad for us. Smoking, drinking, taking too make prescription drugs, taking any illegal drugs at all, not exercising enough, eating too much… the list goes on. So when it comes to ensuring you have enough money for retirement, giving these things up can really help. Most of your bad habits cost money. For example, it is estimated that if you smoke a pack of cigarettes a day and give up at the age of 35, but the time you reach 65, you’ll have saved $360,000. You’ll also have better health. The key is to quit these bad habits and then put the money you would have spent on them into a deposit account. You won’t miss the money because you’ve been spending the same amount for a long time; it won’t affect you in the here and now. However, it will give you a super boost to any retirement funds you have.
Speak To A Financial Advisor
Speaking to a financial advisor such as The Irwin Agency can put your mind at ease and stop you from worrying about your future financial situation. There will be many different avenues that you can go down, and with expert advice, you should be able to make the most of your retirement savings. If you don’t have any financial experience, then a financial advisor is certainly a good route to go down. They can give you a breakdown of what to expect and help you to make good, sensible choices. Once you have decided on a course of action, it’s important to keep in touch with your financial advisor and get regular updates on what is happening. If you want to change your mind about how to invest or save your money, then don’t be afraid to make an appointment to see what other options are available. A good financial advisor will have your best interests at heart.
Postpone Taking Social Security Payments
Currently, when you reach the age of 62, you can take your social security retirement payments. Although this might be tempting to give you a little more money each month, if you do this before you really need to, you might find that it’s just not enough to cover you. If possible, wait until you’re 70 years old before you start to claim. If you do that, you could gain a lot more per month (current figures suggest you’ll receive $1000 rather than the $700 you would have at 62). Therefore, if you have a choice and you can wait, you should seriously consider it.
Cover The Gaps
When you know what your social security income is going to be, make sure you have enough money in your savings account to cover the shortfall between what you’re earning now, and what you’ll bring in. If you can’t do that, then you will need to look at how to reduce your monthly expenses so that your outgoings fall in line with what you’re going to be bringing in. It might mean moving to a smaller property or looking at your debts and consolidating them. Alternatively, even if you thought that you would be doing nothing in retirement, you may need to get a part-time job to ensure that you have enough money to live on. It could be the start of something new and exciting – it’s never too late to start a business, and you may find that you enjoy the freedom of having a part-time job.