It’s Never Too Early For Retirement Planning
Retirement Planning Doesn’t Have to be Scary
Retirement can demand more than you think, and without a solid strategy you may struggle to stay afloat. Studies show that an alarming percentage of retirees look back at their transition with regret, mostly due to inadequate retirement planning in the years leading up to their retirement. Life goes on, and without the income that you’re used to, you’ll need to budget, allocate, invest and spend carefully if you plan to continue your lifestyle.
Luckily, there are several resources at your fingertips, and with some helpful tips and wise decisions you can plan for a happy, healthy and wealthy retirement.
Helpful Advice on Retirement Planning
Some things may not seem critical when you’re first hashing out your plan, but they’ll be very important once you’ve retired. The first principle of how to save money naturally applies to the retirement plan, as well: make a budget and stick to it.
You must go through the planning steps if you expect to wind up with an accurate and reasonable allocation of money for the years to come, and these begin with a budget of anticipated income and expenses. Begin well ahead of your intended retirement date—three to five years is recommended—so you give yourself plenty of time to sort out a reasonable budget.
Retirement can be complicated to plan, and unless you have a good knowledge of the basic issues, you could find yourself struggling to make ends meet rather than relaxing in comfort when the time comes. To avoid disappointment, seek retirement planning advice from your employer and a reputable financial advisor before your make the retirement transition. They can help you understand the precise benefits you will receive, some aspects you may not have considered and the tax laws that apply to your investments.
Create a Retirement Plan
Begin with a budget outlining your assets, the income they will bring and the expenses you’ll have in the years to come. When planning for retirement, take into consideration the type of lifestyle you lead now and what kind of lifestyle you expect to lead once you retire, and be sure to understand the financial risks involved.
Ignoring key facts like inflation, rising health care expenses and the fact that the longer you live, the more you’ll need to stretch your savings will certainly lead to problems down the road.
Financial planning for retirement requires a strategy for managing your income and for growing your savings. You’ll probably need 80 to 100 percent of your pre-retirement income to continue living comfortably, but that number could rise with things like unforeseen medical expenses or big travel plans.
It’s a good idea to bolster your savings by contributing as much as possible into an employer-sponsored 401(k) retirement savings plan, since this money will not be taxed until it is withdrawn.