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Around 50.3% of the people aged 55 and over in the US are now retired. The full retirement age in the US is actually 66 years old but if you have the means, you can retire whenever you like!
Many people put off preparing for retirement because it seems stressful or complicated. Or, they’re too scared to face how much (or little) they have in their retirement savings right now.
But here will come a time when you can’t or don’t want to work anymore. It’s far better to get financial help now than bury your head in the sand. Your retirement plan might look even better than you thought it would.
Read this guide to start planning for retirement today.
Work Out What Your Retirement Will Look Like
Do you want to travel and enjoy your life now and live a quiet, modest retirement? Or do you want to work as hard as possible now so you can retire sooner? Do you plan on downsizing or keeping your assets?
These are only some of the questions you need to ask yourself because everyone wants a different type of retirement. Talk with your spouse, or chat with a close friend, and work out what yours will be.
Figure Out How Much You Need To Retire
Working out what your retirement will look like will also help you understand how much money you will need in your accounts to fund this lifestyle. There are lots of tools out there to help you figure this out based on your individual situation.
Let’s use the example of someone who is 35 and wants to retire at 66. They have $20,000 in retirement investments right now and will contribute $250 a month to their accounts.
Pay Off Your Existing Debt
Preparing for retirement is a lot harder if you already have existing debt. This includes student debt and mortgages as well as credit card and other debts.
Depending on how deep in debt you are, it might be worth paying off most of it before saving for retirement.
Consider Your Investment Options
Have you worked out your ideal retirement and are not sure your current plan is cutting it? Scope out your pension income options! You could be investing in 401(k)s, IRAs, mutual funds, and more.
Don’t forget, your retirement income is taxable so that’s something you also need to consider. Consult a financial advisor to help you choose the best investment options for you.
Now Is the Best Time To Start Preparing for Retirement
In all honesty, the best time to start preparing for retirement was when you first entered the working world. But the second best time is right now. Work out the math, consider your investment options, and create a retirement that will give you a secure and happy life.
You can never learn too much about being smart with your money. Browse our finance articles to discover more personal finance tips and advice!