Retirement often requires more income than people realize when looking forward to closing out their careers. Experts estimate that you’ll need at least 80 percent of your pre-retirement income to maintain your standard of living when you stop working. Here are some ideas to help you reach that goal:
Develop a retirement plan now. The sooner you start saving, the more time your money has to grow and the more secure and comfortable your retirement years are likely to be. Make retirement savings a high priority. Set realistic goals for your retirement future, devise a plan to achieve those goals and then stick to it.
Understand Your Employer’s Pension Plan
If your employer offers a pension plan, periodically monitor its performance to assess its value and growth and to determine what benefits you will be entitled to receive upon retirement. Should you decide to change jobs, be sure to find out what impact that decision may have on your retirement future.
Contribute to a Tax-Sheltered Savings Plan
If your employer offers a tax-sheltered savings plan, such as a 401(k), it may be wise for you to sign up and contribute. Your taxes may be lower upon retirement, your company may kick in more and automatic deductions can make it easier to manage.
Consider an Individual Retirement Account
You can put up to $2,000 a year into an Individual Retirement Account (IRA) and delay paying taxes on investment earnings until retirement age. If you earn less than a certain amount, you may be able to take a tax deduction for your IRA contributions.
Avoid Tapping into Your Retirement Funds
If you withdraw money from your retirement savings, you may lose principal and interest, and you may lose tax benefits. If you change jobs, safeguard your financial future by rolling over your savings directly into an IRA, your new employer’s plan or an investment fund designed to protect your financial interests and meet your retirement needs.
These ideas should point you in the right direction, but you will need more information. Talk to your employer and a qualified professional financial advisor. Ask questions and make sure you have a clear understanding of how your investments are working to secure your financial future.