Retirement. Playing golf, traveling, laying on the beach all day, spending time with your grandkids…sounds nice, doesn’t it? Are you financially prepared to make the transition when the time comes? A recent article put out by MSNBC says that while most Baby Boomers who have old fashioned pension plans in place will be able to comfortably retire, the younger generation will likely end up working longer unless they prepare now and start saving.
What can you as a member of this younger generation do to prepare for a stage of life twenty or thirty years from now? Well it’s important to do your research. Find out if your employer offers a 401K plan and if so what kind. Do they match your contributions? And if so what percentage? Contribute as much as you can and talk to a financial adviser about how aggressive you should be with your investments. If your employer doesn’t offer a retirement plan, suggest that it start one.
Know about how much you need to save to retire comfortably. Most need about 70 to 90 percent of their preretirement income to maintain their standard of living when they stop working. A good plan is to start saving now and continue to increase the amount that you contribute as you get older. The challenge is to not touch that savings if times get tough. Another option is to put money into an Individual Retirement Account. You can put up to $5,000 per year into an IRA, more if you are 50 or older. Do your research to find out which IRA option is the best suited for you.
The good news is that if you are in your twenties and early thirties you can still ensure that you are financially prepared for retirement by taking the right steps and putting a plan into place sooner rather than later. Have you encountered challenges when trying to find a plan that suits you? Have you found an “out of the box” way to plan for retirement? Share your thoughts below!