Smart Guide to Retirement Planning
Do you work for the weekend? In other words, is your Monday through Friday 9 to 5 routine in place just so you can kick back on Saturday and Sunday? Nothing wrong with that. However, we should also be working for our retirement. Technically, we all take a job in the hopes that some day we won't ever have to work again. That would mean retiring as early as possible but still living comfortably. To accomplish that goal you've got to engage in some serious retirement planning. Here are some helpful tips to get you ready for your golden years:
Tip #1: Start Saving Today
No matter how old you are, you need to start saving for your retirement today. With retirement savings, you have two basic options: an employee plan or DIY. Here's a hint: you should have both. The employee plan is typically a 401K that has your company setting aside funds on a regular basis. Sounds nice but actually, you've earned those funds as part of your salary so it's not like a total bonus. The great thing about 401Ks is that you can contribute as well. In fact, you should match your employer's contribution dollar for dollar.
On the do-it-yourself side, you can open up an IRA. The maximum you can contribute to this tax-free account is $5,500. If you manage to make that contribution for 20 years, you'll have a nice nest egg of around $110,000. Not too shabby.
Tip #2: Making Your Savings Automatic
Thanks to the marvels of modern online banking, you can set up automatic deductions into a savings account. This is sort of like, "paying yourself first," which is as it should be. After a while, you'll forget this is happening until you look at your bank statement and see what a nice bundle you're building.
Tip #3: Get Out Of Debt
Yes, easier said than done but the last thing you want is to carry into your retirement is your debt. This might take a bite out of those savings plans, but ultimately you'll benefit if you can knock out those payments and reduce high interest rates. This is especially true on things like department store and bank credit cards. Make them vanish and you'll have an easier retirement.
Tip #4: Try To Grow Your Money
This is where you should bring in the help from a professional financial planner. Wouldn't it be nice if you bought Apple stock 30 years ago? You're retirement would all be set. Although you might not be able to get on the ground floor of the next big thing, you can set up a money market account that spreads an investment over several stock and mutual fund options. Getting your money to grow could make all the difference for your retirement.