retirement

Start saving for retirement early

Article Written by : Global Investing 411

Saving early as possible for retirement is one key to a financial success during retirement. But many wonder how much to save each month. Generally many Americans are not prepared for retirement and do not have enough savings to handle their financial needs when they retire.

During retirement unexpected events such as hospitalization could happen that may create a burden on your retirement savings. Many of us are very well aware that in retirement our monthly income is going to go down compared to what we earned while working. Some manage to payoff big ticket items such as mortgage prior to retirement but many American still carry a mortgage going into retirement.

One published report indicates that only 37.5 percent of the poorest group had $1,600 that they needed in retirement and 62.5 percent of middle income earners had $4,800 they needed each month. Many of these groups needed to take debt in retirement in order to cover the shortfall. This is why saving for retirement as early as possible is critical. How much to save depends on each individual’s income and many other factors. Saving as much as possible after paying all monthly bills as well as saving early as possible is two important factors.

retirement

Before you retire

Article Written by : Be Better at Business

Financial advisors recommend that we pay off our mortgage, credit card debt and other large debt before retirement. Many gets less monthly income during retirement and 40 percent of your budget is for housing and therefore, this advice make sense. Here are few things you can do to get ready for debt-free retirement.

• Make an educated guess of your retirement budget. In addition to main expenses such as utilities and food, add your travel, healthcare, housing, insurance and other expenses. Allowances for Federal, state and local taxes should be included. Estimate your retirement income from sources such as Social Security, pensions, 401(k) and other source.
• Make sure to add your investment goals during your retirement to your budget. While you work, you may have taken more risk and invest aggressively. But in retirement you need more stable investment and it may produce lower interest rate. Also, consider your contributions to your grandkids education and other contributions.
• Review your health care needs. Medical expenses may be an added expense if you are planning to retire before age 65. Your medical conditions may warrant more money for medical expenses during retirement too.
• Make a plan. Armed with all these expected income and expense, you can make a plan for your retirement way in advance and plan accordingly.