Retirement may seem a long way off for people in their 20s,
30s and 40s. Why fret about something that's decades away? Ben
Franklin once said that we must "Look before, or you'll find
Financial advisers estimate that families in Generation X (people
born between 1965 and 1976) and Generation Y (people born between
1977 and 1994) will need to save between $2 million and $3
million to live comfortably during retirement. Moreover, an
estimated 80 percent of American workers are expected to fall
short of meeting all their financial needs in retirement unless
they take immediate action to save more.
But it's not too late to start saving for retirement! Here are
some suggestions to maximize retirement savings now so you worry
your cash-flow by creating a budget. Exactly how much can you
afford to set aside each month for retirement? To find out, look
at how much money you take home in a month, and how much you
spend. How much of your spending covers basic living expenses
(mortgage or rent, food, utilities, etc.) and how much is
discretionary (eating out, vacations, etc.)? Then decide how much
of your discretionary spending you can afford to put away for
the future. What goals and milestones do you want to achieve on
the road to, and during, retirement. Do you want to fund a
child's or grandchild's education, buy a vacation home or travel?
What contingencies do you need to account for, such as health,
disability and nursing care, as you get older?
for the future. Once you get a vision of your future, it's time
to build a formal plan designed to get you to, and through,
retirement on your terms. It's worth asking a retirement planning
expert for help drafting that plan, including such vital
ingredients as an investment policy statement and an asset
opportunities now. The following steps (taken with the help of a
retirement planning specialist as needed) can make a huge
difference down the road:
- Participate in your employer's retirement plan, at least to
where your employer matches contributions.
- Consider investing in a "Roth" account, either inside or
outside an employer's retirement plan. Funds in Roth accounts
come out tax-free.
- Look at other retirement savings vehicles, such as
traditional Individual Retirement Accounts (IRAs).
- Maximize retirement plan contributions if possible.
- Automate retirement contributions so saving is a
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