Retirement Is Coming Sooner Than You Think
If your idea of planning for your senior years is playing the lotto, it is time for a reality check. Those years are going to be here before you know it. Here are some retirement planning facts and tips to prime the pump for you.
It's easy to procrastinate so set up a "painless" payroll deduction for saving.
Open an IRA. IRAs are easy to get, easy to contribute to and easy to save with. Most Americans can set up an IRA - whether it's a traditional IRA or a Roth IRA - and save on taxes.
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.
Social Security pays the average retiree about 40 percent of pre-retirement earnings.
Of the 60 million wage and salaried women working in the United States as of March 2005, just 47 percent participated in a retirement plan. Remember, even small amounts can earn interest and add up over time.
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.
Earnings compound over time, so start investing as soon as humanely possible. This is true even if the amount you are saving is small.
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.
Instead of blowing a tax refund, have the IRS deposit it directly into your IRA or retirement account.
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.
Some 51% of Americans age 55 and older have saved less than $100,000. Some 28% have saved $250,000 or more.
When is it too late to start saving for retirement? It never is. People starting at 50 can still save a lot of money.
For most people, retirement is their biggest financial worry. The key to limiting this concern is to save every penny you can today. Time will make all the difference in your returns, so make sure you save, save, save!