How much money will you need for a secure retirement?
Retirement experts have offered various rules of thumb about how much you need to save: somewhere near $1 million, 80% to 90% of your annual pre-retirement income, 12 times your pre-retirement salary.
How to Plan for a Secure Retirement
Retirement may seem like a distant dream, but the earlier you start planning for it the better. A secure retirement means having enough money saved to live comfortably after you quit working. To secure your retirement and secure your future, here are some tips on how to plan for a secure retirement.
Start Saving Now
The sooner you start saving for retirement, the better. The more time your money has to grow, the larger the amount that you’ll be able to accumulate. Even setting aside small amounts on a regular basis can make a big difference over the long-term.
Take Advantage of Tax-Advantaged Savings Options
You can maximize your retirement savings by taking advantage of tax-advantaged savings options such as 401(k)s and IRAs. With these retirement vehicles your money grows tax-deferred, meaning you don’t have to pay taxes on any of the gains in the account until you start withdrawing funds. It’s important to make sure that you understand the different options available so you can choose the type of account that works best for you.
Create a Diversified Investment Portfolio
Another important factor for retirement savings is having a diversified investment portfolio. Common investments for retirement include stocks, bonds, mutual funds, and other exchange-traded funds (ETFs). Having a diversified portfolio has been shown to reduce risk, and it can help you outperform markets over time.
Understand All of Your Retirement Options
In addition to exploring tax-advantaged savings vehicles, it’s important to understand all of the different retirement options that you may have available to you. You may want to investigate any employer-sponsored plans, such as a pension or 401(k) plan, as well as any Social Security benefits you may be eligible for.
Adjust Your Retirement Plan as Needed
As you get closer to retirement age, you may need to adjust your retirement plan to make sure that it’s still on track. Regularly monitoring your investments to make sure that they’re performing well and that you’re comfortable with the level of risk can help you ensure that your retirement savings are able to last over the long-term.
By planning ahead and staying informed, you can help ensure that you have enough money saved to maintain your desired lifestyle in retirement. With smart planning and dedication, you can create a secure retirement plan that will benefit you in the long-run.