5 Simple Things You Should Be Doing to Plan for Retirement
By October 1, 2015 No Comments
All working people look forward to a time when they can kick back and relax. That sought-after period of life used to be known as retirement. But according to most financial experts, a growing number of Americans do not have the retirement savings they need to stop working anytime soon. How bad is it? A recent GAO survey found that 29 percent of people approaching retirement age do not have a pension plan or retirement savings. As such, they may find themselves working long into their golden years. Here are five retirement planning tips to avoid that unpalatable scenario.Start Saving Now
According to data from the Employee Benefits Research Institute, nearly half of American workers have less than $10,000 saved for their retirement. Most experts believe they need considerably more than that. But how much? Although numbers vary from saver to saver, it is reliably estimated that the average worker must set aside about 15 percent of his/her income for three decades to retire comfortably. Now, that might seem like a lot to save, but with a working life that could last four decades or more, workers have time for proper retirement planning. The key, of course, is to start saving as soon as possible.
Don’t Spend Too Much
For obvious reasons, it’s much easier to save when spending is kept in check. Buying a new car every five years or taking lavish vacations might seem like good ideas at the time, but are they wise investments? It is much easier to put money away at a young age for retirement than when age-related illnesses make it harder to control living costs.
Invest for the Future
Chasing the latest stock tip might be exciting, but it rarely pays big dividends over the long haul. You may want to consider bonds as a more conservative investment to meet your needs.
Contribute at Work
Signing up for an employer’s retirement savings plan can make life a lot easier. Not only will it help workers save on taxes, but the business may also match regular contributions, helping savers accumulate funds much faster than they could on their own. Whether through a 401(k) or some other plan, saving on a schedule makes retirement planning a breeze.
Open an IRA
Any money a saver does not contribute at work should be placed in an Individual Retirement Account (IRA). Putting cash in an IRA not only keeps it segregated, but these accounts also offer numerous tax advantages.
Follow these five simple retirement planning tips to get on the road to a happy, satisfying retirement.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Stock investing involves risk including loss of principal. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values decline as interest rates rise, and bonds are subject to availability and change in price.