6 Ways To Make Sure You Have Enough Money For Retirement
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When are you going to retire? With life expectancy rates rising every decade and currently standing at 79 for men and 83 for women in America, you are likely to have many retirement years to save for. A lot of people are concerned about this; they may be fine now with a regular salary, but what happens when that stops? Will they be able to pay all of their bills? Will they continue to be able to pay any mortgage that is still owed on their house? It has the potential to be a major issue. Here are some excellent ways to ensure that you have enough money for retirement so that you can retire (at least part-time) and enjoy your golden years.
Save Ten Times Your Annual Salary
You should be able to cover all possibilities if you save ten times your yearly income for retirement. It may seem to be a large sum, but it becomes a bit more manageable when you consider that it is just around fifteen percent of your annual salary.
Open a savings account and deposit the money as soon as you are paid each month or week. If you can put it in a high-yield investment account, you may end up with a profit, but keep in mind that these investments can lose money as well as make it. If you’re interested in investments for retirement, click here to find out more. If you want to be absolutely secure, put it in a regular account.
It’s a bright idea to utilize an account that has a penalty for withdrawing cash – this will make you think twice about spending those assets 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).
Understand What Retirement Means To You
It is also critical to understand what you mean by retiring. For some people, this means quitting their jobs altogether. For others, it means slowing down yet continuing to work part-time. Others see retirement as an opportunity to take a break before returning to full-time employment. Still more want to finally get around to doing all the things they had to put off because of work and other responsibilities.
Depending on what option you choose and what retirement actually does mean to you, you’ll need more or less retirement money in the bank. This should be a choice you make as soon as possible since it will significantly impact how much you should set aside and the plans you can make.
Give Up The Bad Habits
We all do things that are harmful to us and are aware that they are terrible for us. Smoking, drinking too much alcohol, taking too many prescription medications, taking any illicit substances, not exercising enough, not seeing the doctor or dentist regularly, overeating… the list just keeps going. So, giving up these items can be very beneficial when it comes to ensuring you have enough money for retirement.
The majority of your poor behaviors are costly. For example, it’s projected that if you smoke a pack of cigarettes a day and quit when you are 35 but live to be 65, you would have saved $360,000. You’ll also be healthier. Plus, as we’ve said, most people live longer than that, so you’ll save a lot more in real terms.
The goal is to break these unhealthy habits and then save the money you would have spent on them; put it in your bank account. You won’t miss the money since you’ve been spending the same amount for a long time, so it won’t bother you right now. However, it will provide a significant boost to whatever retirement savings you may have.
Consult With A Financial Advisor
Speaking with a financial adviser can set your mind at rest and prevent you from worrying about your financial position in the future. There will be many options available to you, and with professional guidance, you should be able to make the most of your retirement funds. If you don’t have any financial expertise, hiring a financial adviser is a smart idea. They can provide you with a summary of what to anticipate and assist you in making sound decisions.
Once you’ve agreed on a plan of action, it’s critical to stay in contact with your financial adviser and get frequent updates on what’s going on. If you want or need to change your mind about how to invest or save your money, don’t delay in scheduling a meeting to discuss your choices. A competent financial adviser will look out for your best interests.
Postpone Receiving Social Security Benefits
Currently, you could begin receiving social security retirement benefits at the age of 62. Although it may be tempting to take these benefits since they will give you a little extra money each month, if you do this before you really need it, you might discover that when you do need it, it’s not enough to support you. If at all possible, wait until you are 70 years old before beginning to claim. If you do this, you can earn a lot more money each month (current estimates indicate you’ll get $1000 instead of $700 at 62). As a result, if you have an option and can wait, you should carefully consider it.
Fill The Gaps
When you know how much your social security income will be, make sure you have enough money in your savings account to cover the difference between what you’re now making and what you’ll bring in. In other words, fill the gaps. If you can’t do that, you’ll need to figure out how to cut your monthly expenditures so that your outgoings match what will be coming in. This could include downsizing to a smaller home or combining your debts into one smaller monthly payment.
Alternatively, even if you expect to do nothing in retirement, you may need to find some part-time work to guarantee that you have enough money to live on. Even if this sounds problematic to start with, if it’s necessary, it’s best to look on the positive side. After all, this might be the start of something new and exciting; it’s never too late to start a business, and you could discover that having part-time work gives you more flexibility and money, so you can still do the things you want to do.
*This article is based on personal suggestions and/or experiences and is for informational purposes only. This should not be used as professional advice. Please consult a professional where applicable.