Everyone thinks about retirement, from the 40-year-old who has had over 20 years in the workforce to the college graduate about to start their first full-time position. However, even though we all think about retiring, many people do not take action until they feel they absolutely must. When is right right time to begin planning for retirement? Are there any deadlines that need to be met in order for us to have a long, happy life after our time working comes to an end? We at Kennedy Financial & Insurance Services say, “Yes!” When it comes to retirement planning, we don’t think you can do too much. We have outlined some of our top steps the most successful retirees take in order to remain happy and stable well into their retirement. Read on to learn more!
Find Out How Much You Will Need
In order to ensure that you have the amount of money you need to comfortably retire, you need to figure out how much you will need to live comfortably. The general rule, which is always adjustable, is that you will likely need about 70 percent of your annual pre-retirement income in order to live comfortably. This will likely be enough if you have already paid off your home’s mortgage and are in good health when it is finally time to retire. However, if you plan to live big in retirement (traveling overseas, building a dream house, etc.), then you will likely need more than you ever made annually before retirement. Also, we recommend that you keep medical bills in mind. Most health care expenses increase in retirement, especially for those who retired before being eligible for Medicare and must pay for insurance on their own.
Figure Out How to Save or Make That Money
Once you know how much you will need, it’s time to figure out where those funds will come from. Retirement income comes from one of three places: Social Security, pensions and annuities, and your savings. You can start by figuring out your estimated Social Security benefits and then calculating any payouts from annuities or pensions.
If this total amount is not enough to live on, then it’s time to consider where the rest of the money will come from. Keep in mind that you will likely need 15 to 20 times more than what you are short each year. For example, if you are short by $20,000 annually, you will want to have anywhere from $300,000 to $400,000 saved to bridge the gap.
When to Plan
Ideally, the right time to start saving for retirement is right when you enter the workforce. While some people may think that their 20s is too early a time, we have to disagree. However, even if you did not start saving that early (and many people did not), that doesn’t mean that you will not have enough money to retire. There are other ways to begin adding to your retirement savings account.
When it comes to when it’s time to start saving for retirement, the right time is right now. Depending on how close you are to retiring, you may need to adjust your strategy for it to make the most sense for you. But how do you know which strategy makes the most sense? How can you maximize your retirement funds before taking the plunge?
Contact Kennedy Financial & Insurance Services
Our team of professionals can help you as you prepare for your retirement. There is no need to worry about what lies ahead when you have financial advisors on your side to guide you. Reach out to us today to schedule a time with one of our advisors. Together, we can come up with the perfect plan to meet your financial and retirement goals.