Are you saving enough for retirement?
Retirement ought to be the relaxing and unwinding phase of your life. You can turn it into an enjoyable one by planning for the retired phase beginning early in your life. Many people pretend that they are prepared for their retirement and they are saving the required monetary digits to enjoy a comfortable living in their golden years (retirement), but studies show that actually only one in ten is prepared for retirement.
The purposeful decision to save for retirement is one of the toughest decisions an individual will ever make during his lifetime. Many people know that it is important, but do not take the correct actions toward it. Studies have shown that women are least prepared to their retirement when compared to men. It also points out that one should save more than seven to ten times their annual paychecks for a good retired life. This is because even if you minimize your spending to a great extent, you should realize that the costs of all the goods are always rising year after year.
There are a few key points you ought to consider when you are planning for retirement. These factors will help you analyze all the prospects and plan in an efficient way for future years.
Things to Remember:
- Save early – Many people do not plan for their retirement. They think they still have many years to go, but they do not realize how fast the time flies. It is important to realize the financial responsibilities and expenses a person will be incurring later in their life. The earlier you start, the more you save by having a great compound earnings return on your investments.
- Set aside a certain percentage of your paychecks – You should set aside a certain percentage of your yearly income for your retirement savings. Saving five percent of your yearly income will be good enough if you are in your twenties. Fifteen to twenty percent of your income must be invested in your retirement savings to make up for the lost time when you are in your fifties.
- Consider the Inflation – The ever increasing price of everyday commodities has to be taken into consideration when you are planning for your retirement. $50,000 dollars per year may be enough now, but think of what it may be like 20 years from now. Therefore, you have to make your preparations in such a way that you can tackle all possible scenarios.
- Do the calculations – You can make use of the immense amount of information available on the internet to do the retirement savings math. There are many tools and retirement calculators available on the web which are offered free of cost. They help you plan for your retirement in a more precise and accurate manner.
- Tax advantages have to be taken into consideration – Calculate the tax benefits and advantages when you invest your money and the expected returns. Careful planning and execution is required it is always. It is best to trust your hard earned money with the most reliable sources for a peaceful living.