30 Jul Ready. Set. RETIRE!
Saving for retirement isn’t about instant gratification. It’s a marathon with huge rewards for perseverance! And here’s the real deal: you may be retired for more years than you spent in the workforce. Do you have enough money saved?
Maybe you’re motivated to sock away cash knowing that you can one day own your home, help adult children and grandchildren, impact your community, or take a dream vacation. Yet living expenses should be top of mind.
Here are a few tips to help you make sure you’re ready.
Figure out what’s your amount needed to supplement social security. A one million dollar nest egg will allow you to pull out around $50,000 a year for about 20 years.
Use AARP’s retirement calculator. According to a Bankrate survey, 61% of Americans don’t know how much money they’ll need to save for retirement.
Get an investing education, so you understand what’s happening with your money. The rate of returns requires that you have knowledge and tools for investing. Read blogs and books. Register for workshops.
Get rid of all debt. Eliminating debt that accrues interest will help you build wealth. Pay off mortgages, credit cards, student loans, car notes, etc. before retiring.
Take inflation into account when you consider what you’ll need over the years. With an average inflation rate of 3% per year, if at 65 you require $35,000 to maintain your standard of living, in 34 years, you’ll need $95,617 a year!
Determine where you should be growing your money. Research investments that you understand and don’t invest where you don’t understand.
1) Know the meaning of the investment to you.
2) Make sure that the investment is in a business.
3) Find out who is running the business and if the person has integrity.
Delay social security benefits for as long as you can to get the biggest amount per month possible. At 66, you’ll receive 100% of your benefit, but if you can hold out till age 70, you’ll max out at 132%.
Don’t take out more than 5% a year from your retirement fund once you’re retired. You don’t want to out live your money.
Get serious about losing weight. There is a strong link between obesity and poor health which can lead to high medical bills.
Save 15% of your income towards retirement. It’s best to start early because savings compound over time, but even a late start makes a huge difference.
Got kids and grandkids headed to college? Save for retirement and college at the same time. Don’t choose college savings over retirement savings. College-aged loved ones can work, start at a community college, save tuition expenses at an in-state university, and get scholarships. College is a luxury. Retirement is a necessity.