No you didn’t read the heading wrongly. The heading for sure got your attention due to some obvious reasons. The word retirement which means the period of a person’s life during which he or she is no longer working or the commencement of that period. It is usually associated with a white haired ninety year old with a walking stick bending as he watches the sunset. Yes, retirement is all about enjoying what you have worked for. This doesn’t mean that you need to be ninety years for you to retire. You can retire at forty or even thirty. For you to be able to retire early you need to do a lot even if you are into fast cars and party rocking. The earlier you start investing for retirement then the longer your money has to mature and grow and for those who start saving in their 20’s is at a great advantage over those who wait until middle age.
For you to effectively prepare for retirement is by knowing your retirement needs. Retirement is quite expensive. Financial experts estimate that you need about seventy per cent of your preretirement income so as to maintain your living when you stop working. The key here is to plan ahead
Another way of preparing for your retirement is by contributing to your employer’s retirement savings plan. You can always sign up for this and contribute all you can. Your taxes will be lower, your company may kick more, and automatic deductions make it easy. Over time, compound interest and tax deferrals make a big difference in the amount you will accumulate.
If you are employed again, you need to find out about your employer’s pension plan. Check to see if you are covered by the plan and understand how it works. Ask for an individual benefit statement to see what your benefit is worth and before you change jogs find out what will happen to your pension benefit.
When you are in your twenties you may think it an old man’s practice but considering basic investment principles will surely go a long way. Putting your savings in investments is quite the bright thing to do as you will be able to keep on with the inflation and other various factors.
After you have successfully saved your retirement savings do not and again I say do not touch your retirement savings. If you withdraw your retirement savings you’ll lose principal and interest and you may lose tax benefits or even have to pay withdrawal penalties.
You should then find out about your social security benefits that are on average equal to about forty per cent of what you earned before retirement. You should receive social security statements each year that gives you an estimate how much your benefit will be and when you can receive it.
For sure it doesn’t end with these few tips. There might be a lot that I have not yet touched on or even without my knowledge left it out. In your quest to making your retirement more secure make sure you ask questions. You will surely need more information.