So if you are reading this then you may understand the importance of planning for your retirement or you may want to. Did you know that Americans spend roughly 20 or more years in retirement? On average, the total cost for a couple over 65 to pay for medical treatment over a 20 year span is $215,000. We know that this can be a stressful time in your life because unfortunately, financial security in retirement does not just magically appear, it takes planning, commitment, and of course, money. So we’ve offered some tips on ways to prepare you for your retirement. Enjoy.
1. Start Saving, and Stick to it.
If you have already started saving, wonderful! If not, start now. Start small and try to increase that amount monthly as your financial situation improves. Just think of it this way, the sooner your start saving, the more time your money is allotted to grow. Set small goals and big goals to make sure you stay on track.
2. Set Realistic Goals
Retirement is expensive. Decide your retirement expenses based off of your needs now and your projected needs for the future. To do this you have to be as realistic as possible. Decide how you want to live in retirement and what will be your recurring costs, then calculate how much you’ll need to save to make that possible.
3. Learn About your Employer’s Pension Plan
If your employer has a traditional pension plan, check to make sure you are covered and understand how it works. Before you change occupations, make sure you find out what will happen to your pension.
4. Match Your Company’s Contribution to your retirement savings plan.
A lot of employers will match your contribution to a certain percent. It is in your best interest to take advantage of this offer. If you don’t, it’s basically like leaving money on the table.
5. Put your money into an IRA to give your nest egg a tax-advantage boost
You are allowed to put “up to $5,500 annually into your Individual Retirement Account”. When you open an IRA you have 2 options, a traditional IRA or a Roth IRA. Your tax treatment of your contributions depends on the option you select.
A traditional IRA offers tax deferred growth
- A Roth IRA offers tax free growth but you must pay for taxes up front.