Saving for Retirement
Saving for retirement is always a good thought to have but it is never that easy in practice. You need to have a good chunk of money available to continue living comfortably once you are past working age. Most Americans between 40 and 60 have less than $,100,000 saved for their retirement income. To have a livable income when you are retired, you need to be proactive and start saving now. Here are some tips you can follow that will allow you to be well on track to a more comfortable retirement.
Figure Out What You Need. First and foremost, you want to calculate how much you will need to save to be able to afford retirement. Some things you might want to take into consideration are the projected rise of living expenses, how many years you will likely be in retirement, and the type of lifestyle you want to lead. However, this is only an estimate and your financial needs can go over or under.
Find Out About SSI Benefits. A Social Security check is a monthly form of income that is tied to your pre-retirement earnings. These SSI checks replace about 40% of an average earner’s income once they retire. The average amount for an SSI check, in 2021, is $1,543 per month. Now if that is something you can live off of, then you may be able to adjust your savings amount. But this is all dependent on your financial responsibilities and the quality of life you hope to lead.
Start Saving Early. It is never too early to start saving. There is also no amount too small to save. Especially if you are a younger person early in your career, you are not expected to be contributing huge amounts to your savings. However, a quick tip is to steadily increase your contributions.
Join Employer’s Retirement Plan. Look into your employer’s retirement plan, and if they have one, such as a 401(k), join as soon as possible. Contribute as much as you can because your taxes may be lower and your company may contribute more. It is also easy, as it is set up as an automatic deduction. You will never forget to save, and you will slowly be building up your retirement fund.
Do Not Touch Your Savings. Emergencies happen in life that may require a large lump sum of cash to solve. However, you should try to never touch your savings. Withdrawing from your retirement fund may result in losing principal and interest, losing tax benefits, and having to pay withdrawal penalties. This is why it is always advised to have savings apart from your retirement fund to take of emergencies that may arise. And if you were to lose or switch jobs, do not withdraw. Instead, leave it invested in your current plan or move it over to your new plan.
Retirement may seem like such a far-off event, but planning should not be. There are things you can start doing today that will ensure you can enjoy the fruits of your labor.
Agents
We hope this information on saving for retirement is helpful to you.
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Kayla is a graduate of Texas A&M University and joined the marketing team at Empower Brokerage in early 2021. She creates content for the company websites and assists with various marketing campaigns. LinkedIn Profile
