Are You Ready For Your Retirement?

« « Keeping Your Home Improvement Cost Low | Discover Your Inner Woodworker » »

Thursday, November 8th, 2007 Subscribe To Our Feed

by Barry Waxller

The first baby boomer has claimed social security benefits, which should be an eye opener for all of us. Specifically, the issue is retirement planning. Few of us do enough of it as the following facts and tidbits reveal.

It’s easy to procrastinate so set up a “painless” payroll deduction for saving.

Start early. The sooner you start saving, the more time your money has to grow. Put time on your side. Make retirement savings a high priority. Devise a plan, stick to it, and set goals for yourself.

In 2005, of those who had 401(k) coverage available, 25 percent didn’t participate. If you are one of these, get enrolled and participate!

If you can, consider working a few extra years after your retirement age. It can make all the difference in your retirement income.

The average American spends 18 years in retirement. Yes, your money has to hold out that long.

On average, a female retiring at age 65 can expect to live another 20 years, 3 years longer than a man retiring at the same age. Savings can increase a woman’s chances of having enough money to last during her retirement.

To get equity out of your home, you might consider a reverse mortgage. Don’t! They are bad deals. Talk with a financial planner about other alternatives that make more sense.

Financial Planners say that a person needs about 70% of their pre-retirement income to live a comfortable retirement.

For the average worker Social Security replaces only about 40% of pre-retirement income, the balance must come from pensions and savings and investments.

Select a target date for your retirement. Now assume you will need 70 percent of your current salary to live comfortably on that date. How much money will you need for 18 years of retirement and where will it come from?

If your employer offers 401k plans, try to maximize your contribution. This is particularly true if they match your contributions in any way.

The biggest mistake you can make with your employers 401k plan is simple - not participating. Start saving now with pre-tax dollars even if you are only contributing a tiny amount.

Rip up your credit cards and pay off all balances. Once done, use the money you would have paid to credit card companies for your retirement funding.

Don’t access the equity in your house unless the money is used to improve the value of your home. Don’t buy flat screen televisions and such.

Consider using annuities to fund your retirement. They are a decent retirement vehicle, but are great because they allow you to be sure you will receive a check each month for a certain period of time.

Do you have enough money to retire comfortably? You will never know for sure, so you need to save more than you expect to need. The difference between living on a couple thousand dollars a month and five times that is huge.

About the Author:

Barry Waxler is a financial advisor with UFCAmerica.com. You can get a unique content version of this article.

Share and Enjoy: These icons link to social bookmarking sites where readers can share and discover new web pages.