Top Financial Planning Tips For Your Retirement

The latest retirement numbers released are not very encouraging. According to EBRI.com, half of future retirees have saved less than $60,000. $60,000 is not enough to last for 20-40 years of retirement. Either plan to be working well into your retirement years or get going saving aggressively to ensure a modest retirement income.

Here are 7 tips to help you plan for your retirement

Know how much you’ll need to retire.

The Savage number or the Number are two of the latest books out to teach people how much they should have saved before they retire. Do yourself a favor and pick up a copy. Retirement is not cheap.

Set your goals and form a plan to make sure they come true.

Start now. Time is your friend when you start saving now. Not tomorrow. Today. Pass on the cup of coffee and start saving today. Make it a habit to start saving. You’ll enjoy your retirement years if you have savings to spend instead of depending on others to lend a hand. The best time to start saving and planning for your retirement is yesterday. Get started today.

Once you start saving, leave it alone.

Once you’ve started saving for your retirement, forgot about it. Leave that money alone and let it grow. The lost gains will never be recovered. Under no circumstances should you use your retirement savings for anything other than retirement.

Start funding your IRA.

You can put away $250 a month, or $125 every two weeks to reach the $3,000 annual maximum for your IRA contribution. Set it up with automatic withdrawal out of your paycheck so you don’t even notice it. When you split it up into small amounts like this it makes it easier to visualize it than saying, “Save $3,000 a year.” About $63 a week is what it takes to max out your IRA for the year.

Learn about your Social Security benefits but do not rely on them.

The government can help supplement your retirement income but do not rely on it as a sole means of supporting your retirement lifestyle. SSA will cover approximately 40% of your pre retirement income but when you retire, that number may be lower. You can contact the SSA at http://ssa.gov/ to get more info about your benefits.

Max out your 401k plan.

This one is just as easy to save for as your IRA, plus you may get a bonus from your boss. If your employer offers a matching program then if you’re not in it, you’re leaving free money on the table. Start off with the company match and then increase your contribution amount by 1% a paycheck until it hurts. And every time you get a raise, increase your contribution percentage by the same amount to maximize your savings. The more money you save pre tax, the less you pay to Uncle Sam, and that’s always a good thing.