Saving For Retirement

Saving Money before retirement and At Retirement

Saving for retirement is often a discussion that most 20 or 30 year olds aren't interested in having. But life is short and before you know it, it's time to think about retirement and not a penny has been saved for the big event.  Don't put yourself in that predicament.

Depending on the lifestyle you wish to maintain, most financial experts will advise you to consider building retirement income that is 60% to 80% of your current income.

The best way to get started is to contribute to your company's 401K.  If you can afford it, contribute the maximum to your 401k.  Websites such as www.money.com/retirement or www.401k.com , which is Fidelity's Web site, allow you to track your 401(k).

If you've looked at the Mvelopes Personal budgeting software, they provide tracking of IRAs, 401(k), stocks, mutual funds, and even your mortgage.  

If your company does not have a 401k or you wish to fund your own retirement plan here are a few options:

IRA (Individual Retirement Account) - The most common and easiest way to save for retirement.  Most banks or investment brokerages will allow you to open an IRA account and you can decide where the money will be invested. 

Keogh – This is a retirement account for self-employed individuals and you have a choice of plans to set up.

When considering retirement you don't want to forget that if present trends hold, you may need to fund your own health care because many employers are cutting or reducing the amount of money they spend on retiree health coverage. You can check out www.choosetosave.org and click on the retiree health savings calculator.

Also giving serious thought about what you want your retirement lifestyle to be will also have a bearing on your retirement plans. Will your retirement consist of extensive or moderate travel? Will you have a second  home or motor home?  Will you be caring for pets or have relatives to care for. These are all things to consider when planning for a comfortable, worry free nest egg.

Pre-retirement or Before Retirement

Ask yourself the following questions:

• What is the market value of all my investments today (include pension and saving plans)?
• How much money do I invest each month?
• What is the average rate of return I can generate on my investments until I reach retirement?
• What will my investment portfolio be worth at retirement based on those assumptions?

At retirement

Ask yourself the following questions: 

• How long do I expect to live, or how long do I need the money to last? 
• How much money will I need/want each month after taxes?
• How much pension income can I expect to receive from the government?
• How much pension income can I expect to receive from a company pension plan?
• How much money can I draw from my personal retirement portfolio and for how long.

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