Many people intend to begin saving — someday. But too often than not, retirement sneaks up and the nest egg simply isn’t sufficient for maintaining a vibrant lifestyle. To ensure that you have the resources to spend your retirement years where and how you want, it’s critical to accumulate adequate savings. Here are some best practices to use in your retirement planning:
Create a Budget
As you start padding your nest egg, make sure you have a plan for how much you’ll save and that you understand all of the options for maximizing a return on your investments. Experts recommend that you start by determining your net worth, which includes all your assets minus your debts. From there, figure out your income goal for retirement — typically 70 to 90 percent of your retirement income — and a budget that gets you there.
Get Started ASAP
It’s never too early to start saving and taking advantage of the power of compound interest; the earlier you start, the more you’ll accumulate. If you’re a baby boomer or older, you’ll need to be a little more aggressive than a younger person would to create sufficient savings to generate your desired retirement income.
Consider Professional Assistance
If you find the options for retirement savings a little overwhelming, consider getting help from a professional financial advisor. As your savings grows, you may be managing large sums, and professional advice can help ensure that you’re getting the maximum return on your money and minimizing your tax burden. A professional advisor also can make sure you take advantage of all opportunities available to you and avoid financial mistakes.
Contribute to Your Company Plan
If your employer offers a retirement plan, it’s almost always a good idea to participate. Although contributing to a work plan can be highly beneficial, approximately a third of people who have a plan available don’t use it. Especially if your employer offers matching, you’ll want to use your 401(k) to accumulate a good chunk of your nest egg.
Commit to Additional Savings
Even if you’re maxing out your employer-based plan, you still may want to put away more money for retirement. For additional savings, consider an individual retirement account, or IRA. Depending on your income, only some — or none — of your IRA contributions may be tax-deductible; if that’s the case, consider a personal brokerage account instead.
Work a Little Longer if Necessary
If you find that no matter how you crunch the numbers, you simply won’t be able to save enough by your desired retirement age, consider working a few additional years to shore up your funds. If you’re like most seniors, you’re still healthy and active, and your employer likely would love for you to stick around a little longer.
Enjoy an Engaging Retirement Lifestyle
The biggest benefit of having sufficient retirement savings is freedom to choose your lifestyle. At The Cypress of Charlotte, you’ll enjoy delectable cuisine, an assortment of stimulating activities, low-maintenance living, and an affordable equity ownership plan. To learn more, please contact us today.