How much should I save for retirement?
Invest in your future!
No matter what phase of life you are in, it is not too soon to start planning for your retirement. Planning for your future can be intimidating, but with the right team and doing some research can help you make the right decision.
The best way to know that you are on the right track with your financial future, retirement, and investment goals is to speak with a reputable financial advisor. For more information on how to find a good financial advisor click here
Retire, save, and enjoying life
When you envision your retirement What Do You See? Do you envision living in a Beach Community in Florida or perhaps traveling the world with loved ones. Taking into consideration what you desire that era of your life to look like, will help you prepare for it.
No one knows what the future holds. and your plans and goals may change from the time you start saving for retirement to the time you retire.
Another factor that needs to be considered when planning for retirement is will you own a home, car, or other major assets.
The living situation when you plan on retiring can determine how much money you need to save before you can retire. Owning a home could mean having it paid off before you retire and not having that monthly living expense. On the other hand, if your retirement plan includes a condo on the beach that living expense needs to be accounted for. Or if you want to move to an area that has great public transportation the expense of a car May no longer be needed.
Changing with your life
Each significant change in your life will require an adjustment to your retirement savings plan. For example, the birth of a child, purchase of a new home, or a career change. These events and others like them can majorly impact how you save for retirement.
You may be currently single, with no plans to marry, but in five years finding yourself in a different situation will mean a change to your finances. Instead of saving for one retirement you now are required to be saving for two.
When you partner with someone in life their financial position can affect yours.
Choosing the right plan when you're saving for retirement can either make it easier or harder to reach your financial goals. A mistake made and your finances early on in life could cost you thousands of dollars throughout the rest of your financial life. Spending time to carefully plan, layout, and strategize about your financial future is time well spent. and this plan needs to be updated periodically.
The plan you have at one phase in your life won't always work for all phases.
When just graduating college your focus might be to work on paying down any student loan debt. Once your student loan debt is paid down and you're more established in your career your next focus might be on purchasing a house.
Balancing both of those unique and individual goals with your financial situation and your retirement plan will require the help of a professional financial planner to ensure that you are using your money in the most effective way possible. A reputable financial advisor will do what's best for their client and not what's best for their profit.
Income: how much should I be saving?
Perhaps the single biggest factor to consider when you are planning for retirement is your current income. Income is any money that comes into your possession through work, investments, and other sources of revenue. Any positive cash flow into your life is considered income.
Discretionary funds is the money you have leftover after all of your obligations are paid. Obligations are things like; rent, car payment, cell phone bills, and others. Your retirement savings most likely will come out of your discretionary funds but a financial advisor will be able to guide you on how to best use your money to reach your goals.
After you retire are you planning on taking a second job? Having a source of income in retirement sometimes becomes necessary due to improper financial planning. However, some others plan to work even in retirement out of pure enjoyment and the desire to stay busy. Even part-time employment after retirement can affect your retirement savings plan.
Long term income
Money that is carefully invested now can you turn into a source of income later in life. When strategizing your financial situation, thinking long-term will always guide you towards the best outcome. Although it can be difficult to look towards the distant future, this is one of the most effective ways to ensure long time financial comfort.
There are other ways to ensure income that does not necessarily require daily work after retirement age. One of these options is to invest in rental property but you can provide a steady income once a person hits retirement. Although, rental property can be a money pit if the right property is not chosen. The risks and rewards have to be weighed equally and carefully considered. This is best done with the help of an advisor who specializes in financial investments.
Income is something that requires careful consideration when planning for retirement. Even a few small income-generating investments can mean the difference between living comfortably or living large after entering retirement. Looking for ways to generate income in retirement can help with unforeseen expenses in the future.
Income will always play a major part in planning for retirement. Be it current income or future income this is an aspect of planning for your retirement that must be taken into consideration. However, there are many other ways to gain income after retiring such as a pension. Most advisors suggest 15% of your annual income. But only a financial advisor can help you decide how much to save for sure.
Pension
One of the factors that determine how much you should be saving for retirement is if your job provides a pension. That may decrease the amount that is required to live comfortably after retirement. On the other hand, having a pension may mean not worrying about the day-to-day cost of retirement living but being able to travel more in the future.
Some industries proved great pensions that can substitute retirement savings completely. To see if this is a case in your current employment talk to your HR representative, benefits planning specialist, or your direct supervisor. There may be other avenues available to you by your employer for retirement savings. You will never know all the possibilities that you have until you explore your options.
A benefit to investing in a pension is that there are often tax breaks associated with it. Some employers will take your pension contribution out of your salary. This allows them to be invested before being taxed. Although there are a variety of variables that have to be taken into consideration such as the state, and type of pension account. To understand your options speaking to your employee and your financial advisor.
Pension vs. Plan
It is tempting to settle in to comfort knowing that there is a pension waiting for you after retirement, but a pension is by no means a guaranteed safety net. It is there to act as a supplement to your retirement plan. A pension may also not be enough to contusion living the lifestyle to which you have grown accustomed to.
Money that is set aside for a retirement fund is locked in for the future. If that money is in an account it is already yours! There is no need to worry about it.
What if the unthinkable happens and a pension you were counting on is no longer available? Will you still be able to continue paying for your expenses?
While no one likes to consider that their security for the future could be at risk the world has no guarantees. If the company that is providing your pension suddenly goes under and no longer will be paying pensions will you be able to provide for yourself in retirement?
Pensions cannot work for you in the same way an investment can. Investing money will allow it to grow, earn interest, and work for you. There are some risks associated with that but it can be highly rewarding. To know what is the best option for you is to make an appointment and speak with a financial planner.
What now?
You know that creating a retirement plan is important. Recognizing that is the first step to preparing for your future! But how do you go about getting on track for retirement? First, start by assessing your needs. This is a perfect place to begin to evaluate what your money goals are. Compile a list of your goals, needs, and desires.
Select a financial advisor and set up an initial appointment. For more information on what to expect in your first appointment with a financial advisor clickhere. Once you begin the process with a financial advisor you are truly on your way to preparing for your future!
Following the plan
Once you have begun the work with a financial advisor that is left to do is to follow the plan they layout for you. That plan may require adjustments in how you spend or what money you place where. You know you can follow the plan but how do you decide which advisor to work with?
Financial Advisor
The best thing for your financial future is to enlist the help of a financial advisor. A professional can help you figure out the right path to take on the road to retirement, how to meet your current money goals, and what changes you can make to have a stronger financial position.
The job of a financial advisor is to guide their clients and assist with making the best decisions for the benefit of the client's financial future. Various licenses are required depending on the state the advisor is working in.
The training each financial advisor has will depend on the institution they work for. Financial advisors are not one size fits all, and their training can make them a better fit for certain clients.
Financial advisors are not just for retirement planning. A good financial planner can help you in any situation to plan for your financial future. Planning for college, paying off college, buying a home, investing, or preparing for kids a financial planner can put you on the right track for your money goals. For more information on other services offered by financial planners check out our other articles here.
Finding The Right Financial Advisor
Trusting someone with your money is a big step! You want to make sure that it is a good fit for you and your needs. Researching the financial institutions in your area can help you choose whom to work with. Not all financial advisors are the same nor will they work the same. Understanding your needs and the options available to you will help you find the perfect fit for you.
Good reviews are something that you want to look for when seeking a financial advisor. A review can reveal how someone works with their clients. Google and Facebook, as well as client testimonials, are the perfect place to get an understanding of the type of relationship an advisor has with their clients.
Checking out the reputation of a financial advisor in the community is also a good way to get an understanding of their work. Community-minded, invested, and well-respected are all good signs to look for when choosing a financial advisor.
Asking for a personal recommendation from a friend or family member is another great way to find a financial advisor.in the past, financial advisers were seen as a luxury only the wealthy could afford but now most people use financial advisors or know someone who does.
It is worth the effort to find a financial advisor who will be a great fit for your family and your needs. They will take the fear out of money management and get on the path to successfully reach your money goals as fast as possible. Trusting a professional is common in every other field, why would you choose to handle your money yourself?
Into the future!
Planning for retirement may seem like a chore, but it is something that you will truly be grateful for down the line. Preparing for your golden years now can make that time less stressful and much more pleasant. The only thing you should be focused on in retirement is enjoying it!
To be the most effective with your retirement planning using a financial advisor is a must. don't waste time and money on the wrong investments or savings accounts. Or to find yourself in a compromising financial position many years down the road. Avoid disaster in the future by planning your retirement now!
Saving for retirement is saving for your future!
Other resources
For more information on financial matters check out our other articles, click here or give our office a call.
