Whether you picture your retirement lounging on a sunny beach, getting more involved in your community, or starting the business of your dreams, if you don’t plan for retirement these may remain dreams and not reality. The beginning of the year is the perfect time to reevaluate what changes you may need to make to make headway towards your ideal retirement.
In a report done by Financial Finesse, they found that only 19% of American employees reported being on track for retirement. They also found that employees making under $60,000 a year are half as likely to report they feel on track to retire compared to people who make over $100,000 a year.
Here are some steps you can take to help prepare for your retirement
Run a Retirement Analysis
There are some great guidelines on how much you should have set aside for retirement. Fidelity suggest that you should save the following for retirement based on your age: 35 year olds should have one times their income saved, 45 year olds should have three times their income saved, 55 year olds should have five times their income saved, and 65 year olds should have eight times their income saved. These guidelines are a great starting point, but a retirement analysis will determine how prepared you are for retirement based on your personal situation and then we can help you make adjustments if you need them.
Contribute at least 10% to your 401k plan
If 10-15% is too much to start out with, start contributing enough to get the full match. Later, get in touch with your 401k plan department to increase or see if they have an auto-escalation feature that would increase your contributions slowly to get to the 10-15%.
Look for financial help
Many times you can find help easily through your HR department by reviewing your benefits package. You may have the option for long term care insurance, life insurance, free estate planning, or health savings accounts. Another option would be to find a local Certified Financial Planner that can help you prepare for retirement.
Plan debt payoffs
Think about timing the payoff of your car, house, or loans with the year you want to retire. It is ideal to have as little debt as possible in retirement since you will be on more of a fixed income. You’ll also want to think through any large purchases you plan on making ten years or less from retirement.
Consider different ideas for retirement
There are people that may not have the income needed to retire with their current lifestyle. They may need to make choices that will allow them to live more comfortably on the income they have. It might mean relocating to an area with lower taxes or a lower cost of living, or downsizing to a smaller home. It could also mean getting a part-time less demanding job that is enjoyable.
When it comes down to it, retirement is all about planning. If you would like help with your planning or would like to look at a retirement analysis of your situation set up a time to visit with us by calling 952-657-7470 or emailing email@example.com.
If you have any questions about retirement in Minneapolis feel free to come pay us a visit!
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