Planning for retirement is something we all need to do a lot earlier than we probably did it. Hopefully, the financial crisis the economy went through back in 2008 will help the younger generation learn a few valuable lessons that won’t leave them broke and destitute. Fortunately, it does not appear that there is any need to panic over the thought of retirement at the moment. We will let you panic about more important things, such as the NBA finals and whether or not the weather this weekend will ruin your travel plans. We know there are more important things in your life to worry about at the moment, so we want to take some stress off your shoulders.
If you have stocks, bonds, online brokerage accounts, or any other type of investment account for retirement, you might have questions. It’s good to have questions. Asking questions is a great way to actually get some valuable answers and minimize your panicking. Financial planners hear it all, but some questions they hear more than others. What are those questions and, more importantly, what are the answers? If you also want to set up an estate plan while planning your retirement, you may contact an estate planning attorney or a probate attorney. An estate planning attorney can help you navigate the complex work of estate planning and create a will and/or trust that will hold the law to your decisions regarding your assets.
I waited too long to start saving for retirement, now I don’t know what to do; is it too late?
Unfortunately, this is one of the most commonly asked questions in terms of retirement and financial advice. Many of us wait too long. I didn’t start planning my own retirement until well after we had kids, I was working from home and then had to begin paying my own retirement. It was around 28 or so – I should have started a decade before that when I got my first job.
Fortunately, it’s not impossible to start late. Financial advisors recommend that you put away at least 15% of your income starting right now. If you can, put away more than that. It’s the starting point when you need to get a late start on saving for retirement.
I can’t afford to save more for retirement, what do I do?
No one feels that they have enough disposable income to save more for retirement, and that is a problem. When someone approaches a financial advisor with this issue in mind, they typically get the same answer no matter who they go to. You do have enough money to save, you just have to find it.
No, you don’t have money hidden away in a sock drawer you forgot about – unless you do, of course. What this means is that you have to make a change to your priorities. Is going to see a movie every Friday night right now more important than contributing that additional $50 to your retirement account and actually retiring one day? Is a cup of coffee every morning more important than retirement? If you can find something to spend money on that you don’t actually need to get by in life, you have money to put toward your retirement account.
How do I know how much I need to retire?
It’s a truly excellent question, and it’s one without any answer. Sure, you could probably get by on what you’re making now if you live comfortably today. However, it all depends on a few factors. Will you have a mortgage when you retire? Will you sell your home and downsize to something smaller you can pay cash for? Where will you live? Will you be looking for assisted living options or independent living for seniors?
You need to account for the fact that while you might not spend much right now on entertainment, you’re at work all the time which hinders you from doing that. When you are home all the time, you might just spend a lot more on entertainment.
From there, you need to ask yourself how you want to live when you retire. Do you want to live frugally on a budget or do you want to spend, spend, spend? These are the questions you need to ask yourself when you begin planning for retirement to get a good estimate of what you’ll need.
My spouse doesn’t have much retirement, is that all right?
Unfortunately, this happens all the time when someone is a stay-at-home spouse or just works part time to have a good time. This person probably doesn’t have retirement. If you can, it’s recommended that you begin saving now. Start your own retirement fund for your spouse and be diligent about placing funds into that account. It would be far more helpful if your spouse had an employer who would match an employee retirement account contribution, but it isn’t impossible for you to save when you have to do it yourself and have on employer to go through. This is where we recommend you look for some expert help; someone who is well-versed in this type of thing can talk you through it, answer your questions and help you make the most of a situation.
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