The thought of sipping drinks by the pool and watching television kicked back in your recliner anytime you feel is the promise of retirement. It seems the professional world dangles that carrot in front of you as you slave away forty plus hours a week.
Getting to that paradise is a long journey that involves preparation. Saving for retirement is a big chunk of your financial goal. Knowing how much you really need to retire these days will help you find comfort that you will one day grab that carrot.
Your Magical Retirement Number
Many financial advisors proclaim the magic retirement number to be one million dollars. That number is astounding and seems impossible to many workers especially just starting out in their careers making a low salary. Most professionals in today’s world don’t live up the magic retirement savings number. The average retirement savings is about $104,000 for those ages 55 to 64 and $148,000 for those ages 65 to 74 years old. Of course, these numbers can and will change over time for each generation. Your number might not be the same number as your co-worker.
What Is The Retirement Age
The normal retirement age is 65 because that is when you can start signing up for Medicare. However, there are many people who will retire before that because they have a job that either allows them or requires them to do so. These people will find that they can retire at around 52 or 53 if they are doing a job that retires them after 30 years. People in the military must retire at 55. People who work in the public sector could retire later if they take promotions, and people who have lower-paying jobs might work all the way until they are 65. the person who is retiring needs to consider all the following things before choosing a retirement time:
- Do you want to stop working
- Do you want to start a new business
- Do you want to travel
- Are you ready to change careers
What You Could Consider
You may aim to downsize after retirement while your co-worker plans to travel meaning your numbers should be different. Many people make a goal of 80% of their income before retiring. This means in order to know how much you will need to live you start by multiplying your household income by 80%. This is the basic amount most people will need in retirement to sustain everyday life. After this, you subtract your household Social Security income. This number is the amount you will need from savings. Many financial advisors say you should be able to withdraw 4% of your retirement savings each year without worry and this money should last you many years. Using this advice, you divide the amount you need from savings by 4% giving you a true target for retirement savings.
Once you know your target, you can start to make a plan. It may seem insane if you are early in your career to think ahead 30 years, but it will be worth it. If you plan to retire early in your career you will need to up the ante on your savings and your goals. Financial advisors recommend saving at least 15% of your pre-tax income. This might sound extreme to some especially if your salary is low. If this is too high, start at a comfortable number for you and boost this rate by one percentage if possible every few months.
401K And Similar Programs
One thing that helps this percentage is a 401k matching program. Many companies offer a match or a similar retirement plan that helps with savings. Put aside the maximum amount the company will match if possible to boost the 401k savings. Another thing to do if the percentage scares you is to pay off debt. Debts weigh you down and you sure don’t need them in retirement. Focus on your debt and pay it before saving large percentages of your salary. Retirement doesn’t have to be all about savings either.
Investments are a huge way to boost your nest egg. A large percentage of your savings should be invested in stocks. Stocks on average have a total return of about 10% a year. Some do even better than this. It’s next to impossible to know if a stock will be a total hit or miss, but it’s also next to impossible not to invest and be left out of the thousands you could have in “free” money.
How To Sign Up For Medicare
Signing up for Medicare is something that you typically do when you are turning 65. You must go into the government system, and you will get your benefits as soon as you turn 65. You can renew your benefits every year and you are given the chance to use all four parts of Medicare. This is a very good system that practically pays for everything, and you will find that you could use this system to get medical care that you might not have gotten in the past.
Medicare has several parts, and you need to know how each of them works so that you are not confused:
- Part A is a regular medical coverage
- Part B covers transportation and equipment
- Part C is an advantage plan that offers monthly services
- Part D covers prescriptions
Special Deals and Discounts You Can Receive
You could get special deals every day because you are retired or over 65. You simply have to ask if a company or attraction is offering such a discount. You could get discounts on the park tickets for a vacation that you are taking with your kids, or you could get discounts at the grocery store. You might even get a discount when you buy a car, and there are special deals that you can get for loans that you might take out. You could use these discounts to live well, or you could use discounts to make sure that you get a good deal when you buy a space for your new business. You will get discounts on travel, and you will even get discounts at restaurants. ask about the discounts you can receive every time you go somewhere. People are happy to give them to you.
Living In Retirement Homes
Living in retirement homes is something that you might consider if you do not want to maintain a home as you normally have. However, you have to be sure that you have gone into retirement homes to see what they can offer. All these homes are different, and you must be sure that you go to a place that will accommodate you in every way. There are locations that will be very hard for you to live in because they do not give you what you need. There are other places that you might want to go to because you think that they cannot offer you the support that is required.
Making Your Choice
You could choose places that have security, or you could choose places that are nothing more than colonies that have their own houses. You are given support because you are a retiree, and you are not maintaining a home like you normally would have. Each person who is trying to make the right choices for their retirement needs to have a look at places they can go that will help them live well.
Planning For Retirement
You can start planning for retirement right now because you might have an idea of how you will get there. You could get a financial planner who will tell you what you need to do, and they will show you a plan for the retirement that will give you the right amount of money. You have to be sure that you have chosen the right retirement plan because these plans will give you the right amount of money to retire on. Each person who has invested in their retirement in the right way will be much happier because they have access to the right funds. They can use the retirement plan to start a new business, travel, or just sell their home and move to the coast. You must ask your planner what they would do, and you can pick the age that you want to retire.
The retirement plan that you have made will be much easier for you to manage when you have a planner helping you. They can tell you the right age to retire, or you already know when you will be asked to retire so that you can start planning. You need to have all your documents ready, and you should get help when you want to sign up for Medicare. You can work with these companies to plan for living well after 65, and you can even get on Medicare early if you need to.