When planning for retirement, no age is early. You can start saving for your retirement as soon as you get a job and start earning. The earlier you will start saving and investing the better it is. This will help you have a really wealthy retirement and help you not to get broke soon. Here is FinanceShed with a complete guide on Retirement Goals and how to have Savings for Retirement.
The first question that arises when planning for retirement is when to start savings and how much to save. Our ideal answer will be “as early as you can” and “as much as you can” as the more you will contribute the more you will get to spend on your retirement. It is a general tendency that the more money you have, the more you’re able to save. But even if you’re not earning a higher salary that doesn’t mean you shouldn’t still be preparing for retirement. Here are some basic things you should consider while saving for retirement. Importance Of Retirement Planning is essential for a happy life ahead.
First and the foremost thing you need to do is set up your goal. Setting up a goal is very important as once you decide how much you will need for your retirement you can have an easy break up of how much you should save every month. Set benchmarks along the way and make it more rewarding.
The second thing you can do is to automate your savings. By doing this, you won’t have to contribute to your savings account every month as the contribution to a retirement savings account will be done automatically each month and this will help you not to worry about spending and savings as this is a kind of compulsory savings.
The other thing you can do is contribute to 401(k). Try to invest in a 401(k) plan if your employer is offering one. This plan allows you to contribute pre-tax money and that comes out of your paycheck before federal income taxes are assessed. Before investing in one you must consider what your income tax bracket will be in retirement to help you decide whether this is the right choice for you. Also, while going for 401(k) it is recommended to match your employer’s match and contribute to your fullest to get maximum benefit.
Keep an eye on your spending habits. Try to keep track of how much you are spending in order to have a decent negotiation with yourself about the expenses that are needed and those which are not needed. Prepare an online worksheet that can help you set your budget for your spending and retirement.
If we look at the age-wise planning, try to contribute to your savings funds at least 5% of your total income at the beginning of your career. The early you start the more you get. Try to increase the savings rate to 10% by the time you turn 35 and maintain this level until you get to retire.
The best way you can set your goal and make proper planning is to take the assistance of online personal retirement calculators provided by many online applications. This will give you a decent idea about how much you should accumulate and how much you must set aside and keep track of regularly.