Is Your Money Ready for Retirement?
People in the earlier phases of their careers often think about saving money with a fun financial goal in mind, such as buying a new car, taking a vacation, or perhaps saving to purchase a new home. As we get older, thinking tends to shift to the long-term strategies of retirement planning.
No matter how much you love your job, you likely want to be able to retire comfortably and on time. Here, we'll look at common questions about retirement planning, as well as why it's never too late to start putting money away for the retirement you want.
How Much Do You Need to Save For Retirement?
While exact retirement planning needs differ from person to person, most experts suggest that you should aim to replace about 80% of your gross annual income for a comfortable retirement. As you get closer to retirement, you are more aware of your expenses and how you would like to spend retirement and the costs associated. You may find you need more or less than the general 80% rule. On the one hand, you will not need to save for retirement anymore or possibly pay a mortgage if your home is paid off. On the other hand, you may start incurring higher health care expenses or want to make a move or travel.
Starting Retirement Planning Late? What You Need to Know
If you're getting started with retirement planning a little later in life (age 50 or older), you're not alone. You can take this opportunity to focus your time and energy on catching up your retirement savings. A few changes in your financial habits can go a long way.
You'll want to pay off consumer debt, determine an investment strategy, consider what kind of retirement accounts you can contribute to, set a reasonable but meaningful monthly retirement savings goal, and work with a financial professional to ensure that you're making progress.
Getting Started Right
If you're young and ready to take charge of your retirement planning, you're making a smart move. Keep in mind that your financial strategy is not cast in stone. Ideally, your financial plan should be revisited every couple of years or when there is a life-changing event that may result in an income shift.
Start by putting away 10% of your income (no excuses — even if you find a great vacation deal), sign up for your organization's 401(k) plan to receive a company match or open a Roth IRA, build up an emergency fund to decrease the likelihood that you'll ever need to touch your retirement fund, and work with a financial professional to create an investment plan.
Ready to Take Charge of Your Retirement Planning?
I know that retirement planning can feel overwhelming. Whether you've been saving for years, or you're just getting started, I can help you make the most of your finances in the years ahead. Reach out today to schedule a 15-minute phone call to get acquainted with each other and discuss how I can set you up for the most comfortable retirement possible.