Getting Ready to Retire

One might think retirement planning is still the same after so many years but only because it’s the same work, save, and retire process. Modern savers must contend with various difficulties that were not a concern for earlier generations. With life expectancy longer, bond yielding lower than in the past, and contribution plans facing market difficulties, there are many factors to consider.

Retirement Savings: How much do you need?

Determining the amount you need to save for retirement will rely on a variety of contextual circumstances, including an individual’s projected retirement age, annual income, what you want to do, the lifestyle you want, and where you plan to live.

Retirement experts advise pensioners to follow the 70% rule. It states that your retirement savings should replace 70% of your annual salary. There’s also the recommended 4% rule suggesting that to have a pleasant retirement, seniors must spend no more than 4% of their retirement funds annually. The retirement duration should also be kept in mind. Planning for 20 to 30 years is ideal, better to overestimate and ensure you'll have enough.

How to get started saving for retirememnt

The best time to start planning for retirement is in your late 30s and early 40s, but you can start as early as your 20s. The task will become much more challenging the longer you wait and the more money you'll need to set aside annually. Before you start, here are a few things you should keep in mind.

• Set a budget
• Automate transfers
• Set up an emergency account
• Repay your debts

There may be a lot to take care of and finalize but think about the life you want to live in retirement. It will all be worth it.