Depending on your age retirement may be 30 years away or it could be right around the corner. Have you started thinking about it yet? The cold heart truth is that many people haven’t begun to plan for retirement yet. That doesn’t have to be you, though. Today, I will share with you three tips that will help make retirement a reality.
Consider your income needs
The first thing that you should do is consider your income. Sources say that most people will need between 70 to 80% of their current income level in retirement. Since you’re Dinks, that number may be higher or lower depending on your living situation. If you plan to maintain your standard of living, there are some things that you should think about.
If you have a mortgage, look at when it will be paid off. The sooner that it will be paid off, the better. You won’t need as much money anymore because you won’t have to pay the mortgage anymore.
Is your home old or high maintenance? If the answer to either one of those questions you should take potential repairs into account. Depending on what needs to be fixed, you may be out of a lot of money. You may even need to move to a cheaper house in order to stay within your income. Something else that happens when you retire is that you won’t be putting money towards your retirement savings anymore. You will now have that money freed up to use.
I don’t care where you are in life, but you need to take some time to learn some basic investment principles. It may be foreign language to you in the beginning, but you will thank yourself down the line for learning how to invest. Everyone’s style is different. You and your partner should take the time to figure out what investing strategy works best for y’all.
Where is the money coming from
The final tip is to know where the money will be coming from. If you take heed to my advice above you will eventually have some money coming in from investments. That probably won’t be enough. Retirement income can also come from employer-backed plans, government sources, and personal savings. Make sure you sign up for a 401k if your employer offers one. Contribute as much as you can to it. Your taxes will be lower. Over a period of time, the interest and tax deferrals can make a big difference in the amount that you will have.
When it comes to government sources, social security is the most common form. To figure out how much you will be paid in social security, check with your employer’s plan.
Considering your income needs, learning investments and knowing where the money is coming from are three things that you must do when planning for retirement. For some of us it’s a long time away, but for others, it will be here in less than ten years. Whatever your age is you should have a plan in place.