Ask elderly about retirement planning and they will tell you that you should think about it as early as possible. Even if it seems that it is a long way off, it always pays to start a little bit sooner.
How much you will need during your retirement depends on many things, but the earlier you start, the better your situation will be.
While the US government can help elderly get by, it is your savings that will make your life comfortable during retirement.
What is a Retirement Plan?
A retirement plan can also be called an investment plan. It refers to systematic savings that prepare you for the retirement. With rising expenses, you need a solid base to live the life that you want when you quit your job.
Building a retirement plan require a lot of effort and time. It helps you accumulate savings and make them grow so that when you retire, you do it with some money on your accounts.
The main idea is to invest a certain part of your income in a plan which gives you best returns. While more people understand the importance of retirement planning, many still do not know how to start their retirement fund. As a rule of thumb, you should start with determining the retirement age.
How Many Years Do You Want to Spend In Retirement?
Even though you can retire early, it may be worth it to work a little longer. Nowadays, more and more people choose to work as long as they can either part-time or full-time. It happens because people tend to live longer. Today, over 80% of the US population is expected to live till 90, so many choose to stay at work after 65.
In future, people will live even longer. But let’s say you plan to retire at 65. It means that you need to have a retirement plan that will provide income for at least 25 years or even more, and make sure you will be able to live the life that you want.
Budget for Retirement
If you are getting close to retirement, you should definitely create a detailed budget. Think about expenses that you will have later in life. You should take many things into consideration, but at least count insurance, maintaining a house (or paying rent), replacing appliances and taking care of your car.
Think About Retirement Lifestyle That You Want
What will your cost of living be during retirement? Some costs will go down (such as education and work-related travels) while other costs often go up (such as healthcare). You should also think about your hobbies in retirement. What about traveling, going out to shows or joining new clubs? Take everything into consideration.
You should also have a budget for the unexpected events. For example, think about the big expenses that need to be paid sometimes – like the new roof, a new car, or a house repair.
Here’s Your Next Step…
Are you ready to start? Click here to Contact Calvert Investment Counsel now to schedule a time to speak with our retirement specialist.