Many know the importance of investing and saving for retirement during their working years. However, what happens when it is time to retire? According to a survey, only 42% of nonretired workers expect their savings and income to last for the rest of their lives. After working for 40+ years, many won’t have enough to make their Golden Years truly golden. Here are some tips to ensure the proper steps are put in place in preparation for your retirement season.
Make A Budget
Just like the normal working period, it is essential to budget for your retirement. This should be the first step you take before considering retirement, so you know exactly where the money is going. Track all your spending and subtract this from your monthly income. This way it will be easy to see if there are any areas where your spending needs to be restricted.
Know How Much Should Be Taken Out of Retirement Accounts Each Year
Most financial professionals agree that withdrawals of 3-4% can be taken from a retirement account each year. This should enable the money to last 30 years. However, this rule of thumb is no guarantee. If the market is down, adjustments may have to be made to how much is taken out to stretch out savings. If you are wondering where your retirement account stands, click here to access a retirement calculator that can help you evaluate how much your 401K may be worth. It is important to have an idea of how much should be taken out yearly but being flexible with the market will allow for a more sustainable income.
Think About Purchasing Guaranteed Income for Life
For many, this could be in the form of an annuity. Some annuities can charge a lot in fees so be careful when considering purchasing one. In addition, there are some who will receive a pension. Teachers, local government officials, protective service people, and many others are common recipients of a pension retirement plan. A pension can be a nice source of income in retirement so make sure to look back at old jobs and check your eligibility.
Most dream of the day they can retire and all the fun and relaxation it will bring. Don’t let worries about money and wondering about how much you need prevent you from carrying out your retirement plan. Following these tips will help prepare you for the transition to a successful retirement season.
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