From both a personal and financial perspective retirement is one of the most important life events that many of us will ever experience. From a financial perspective realizing a comfortable retirement is an incredibly extensive process that takes sensible planning over years of persistence. Managing your retirement is an ongoing responsibility that carries well into ones golden years. It is imminent that all of us would like to retire comfortably, the complexity and time required in building a successful retirement plan can make the whole process seem nothing short of dispiriting. Although it can often take place with less financial pain with long term commitment with an attainable savings and investment plan.
How to prepare for retirement:
- Start saving, keep saving and stick to your goals. Each month you should aim at putting a bit of your salary into a savings account.
- Know your retirement needs: Retirement is expensive, financial experts estimate that you will need at least 70% of your preretirement incomes and 90% for low earners.
- Contribute to your employer’s retirement plan: If you employer offer a retirement savings plan, sign up to contribute all you can as your taxes will be lower, your company could kick in more and automatic deductions make it easy. Over time compounded tax deferrals make a big difference in the amount you will accumulate.
- You should consider basic investment principals: How you save can be as important as how much you save. You need to take inflation into account and the type of investment you make play important roles in how much you will have saved at retirement. Know how your savings or pension plan is invested.
- Do NOT touch your retirement savings: If you withdraw your retirement savings you’ll lose principal and interest ad you may lose tax benefits or have to pay withdrawal penalties.
- Ask your employer to start a plan for you: If your employer doesn’t offer a retirement plan, suggest that they start one. There are a number of retirement saving plan options available. Your employer may be able to set up a simplified plan that can help both you and your employer.