Life happens while you're busy making plans.
No worries. You are not the first person who fears you will be working until age 90. Here are a few steps to get your retirement on track
1) Determine how much you will need in retirement. One rule of thumb is that you'll need 70% of your pre-retirement yearly salary to live comfortably. That may be enough if you’ve paid off the mortgage and have no debt. If you want to travel the globe and buy the luxuries you’ve always wanted, you will probably need more.
2) Be clear about where you are now. Are you still working? When do you want to retire? How long will retirement last? Do you come from a long-lived family? How is your health? Will you still have health insurance? Are you eligible for benefits from someone or somewhere else?
3) Explore retirement calculators online. The Social Security Administration is the most comprehensive retirement planning site. Visit their Retirement Estimator page for a general idea of what you can expect in SSA benefits. Continue to look around the site to determine if you may be eligible for other SSA benefits.
4) Check your Social Security estimated payout frequently by setting up an account at My Social Security.
5) Start contributing (or contributing more) to your 401k immediately, especially if your employer contributes. Saving at least 15% of your income is essential to building a nest egg, but when trying to catch up, more monthly savings are required. If you can’t afford 15%, start with what you can and build from there.
6) Consider retiring later. Retiring at 70 may generate far more social security and additional income.
7) Increase your income/decrease your debt. Consider a side job to increase your income so you can pay off current debt. Paying off your mortgage is also an excellent goal.
8) Consider moving somewhere with a lower cost of living. This has helped many to retire more comfortably. CNN Money has a calculator that will tell you how far your money will go in another city. Some retirees are even moving overseas.
9) Talk to a financial advisor. If you don't have one, many employers have an advisor that manages the 401k plan. You can talk to them for free. This is also another great opportunity to speak to your HomeFree-USA Homeownership Advisor who can help you to incorporate saving into your current spending plan.
Retirement is tricky because the amount you need is based on your current and future lifestyles. The sooner you start, the better you will do.
What do you envision for your golden years?
And so it is.