What kind of a life do you envision in retirement? Depending on how many year away retirement is for you, that may seem a bit fuzzy in your mind. You can eliminate some of the uncertainty by planning for your retirement, even if it is decades away. Successful retirement is all about saving early for retirement and setting long term saving goals.
Most people need to save for retirement in order to have a source of income in the later years of their life. Saving requires an understanding of:
* different investment principles
* taxes
* inflation
These are factors that important to understanding the basics of retirement saving and investments.
How much money will you need when you retire?
How will inflation change how much you will need?
How much do you invest now?
Where do you invest your money?
To approach the basics of retirement saving and investment, look at the options you have for saving for retirement:
1)Check your Social Security statement of benefits- Be familiar with it and check for accuracy.
2)Research Available or Existing Retirement Accounts at Work- Retirement accounts like 401 k plans and IRAs are opportunities to save for retirement with pre-tax dollars. Look into whether you employer offers matching contributions.
3)Look into IRAs You Can Get to supplement your plan from your job- Investigate plans for making tax-deductible contributions to an IRA, especially if there isn’t one from work.
4)Investigate the advantages of an annuity- Perhaps you have already reached your maximum for work retirement plans and your IRA, so look at earning additional tax-deferred growth of your savings in an annuity.
Although there are many aspects to retirement planning, one that you need to factor in to understand the need for long-term planning is this: Inflation. Inflation will have a large impact on how much money will be needed for retirement. Even that concept is not as fuzzy as you might think as there are financial resources that can help you project for that future need.
Start tapping into available resources to plan for your retirement. Many employers offer seminars on retirement planning. Communities and financial institutions set up information and educational sessions to help local people look ahead to their needs for the future.
Your local newspaper and the World Wide Web can direct you to certified financial planners who are a good match for your goals. A good starting point is to figure out where you are right now in terms of planning for your retirement. Begin with adding up the income you project as being available to you.
*Your Retirement Plans from your working years
*IRAs
*Other investments you can put toward your retirement, such as stocks, bonds, real estate, etc.
Projected annual pension
Start there, make it a point to educate yourself about the basic terminology involved in savings and investments. Then seek further education opportunities from certified professionals and see how to make the most of your money and your working years.