Set your retirement goal
Setting a goal for retirement is the first step in making sure your retirement is what you expect it to be. Learn where to find the money you need to set aside for your retirement, then set a savings plan.
Have you thought about whether you are on track toward your retirement goal? Have you set any retirement goals? Many people worry about whether they will be able to afford to retire. The first step to planning your retirement is setting a savings goal and finding the money needed for that retirement savings goal.
Start by assessing your current assets. Add up any cash on hand or in a savings account in the bank. Review any general investments you might have. Then, look at anything you could convert to cash such as savings bonds, recreational vehicles, or equity in a house or property. Only include anything you are willing not to touch for about 10 years. Add all of these items up and this will give you an estimate of your current assets. When you are reviewing your assets for retirement, take a look at any old retirement accounts you may have from former jobs. Include them in your retirement savings goal. Remember, the average person spends approximately 20 to 30 years in retirement.
The United States Department of Labor gives us tips on ways to prepare for retirement. The first step as mentioned is to start saving and keep saving. Set your goal, assess your current assets, and make a plan to get there. It is never too early to start saving. Second, know your retirement needs. Experts estimate you will need about 70% of your pre-retirement income to maintain your standard of living. Third, contribute to your employer’s retirement savings plan. Decide what you can save and contribute. This could lower your income taxes and using automatic deductions makes it easy. If you don’t have access to an employer’s retirement savings plan, seek out a certified financial planner and begin your own individual retirement plan.
You can estimate your own retirement needs by using the Ballpark E$timate worksheet at choosetossave.org. This website will allow you to fill in your figures on an electronic worksheet or print one off and figure it by hand. Michigan State University Extension also has many personal finance articles on their website.