One third of all Americans have nothing saved for retirement, or don’t have life or health insurance. Are you one of them? Even if you do have some money set aside for your retirement, you may not be saving enough. Do you know how much you need to save today to assure that you can maintain the lifestyle you lead now throughout your retirement?
Many people are confused about how to start saving for retirement. The numbers can be daunting, and there are so many choices for savings out there that you may be overwhelmed by the possibilities.
The first step to saving for retirement is figuring out how much you need. This will be based on how much you feel you need per year during retirement to pay your bills while having money left over to travel, play golf, or take up a new hobby that you just don’t have time for now. Once you determine the amount in today’s dollars that you need, you’ll need to figure out how much that will be whenever you retire. Inflation drives up prices, meaning you’ll need more at retirement to pay your bills and live comfortably than you would need today. A financial professional can help you determine how much you’ll need to save to cover your bills and hobbies.
The next step is simple: save! While the concept is simple, it’s not necessarily easy to do when you consider the fact that you have many choices, all of which will be driven by your current age and the age at which you’d like to retire. Riskier investments are typically reserved for those that have a lot of time before retirement to recover should the investment go poorly, while safer investments are recommended to those close to retirement age.
Keeping your personal finances in order and being sure to stick to a budget will help you have enough money left over after the bills are paid to put money into your retirement savings. The more you save now, the more comfortably you will be able to retire.
One thing that can drain your savings quickly is having a medical emergency without holding insurance. Health insurance is essential to assure that your retirement account won’t be depleted in case of an emergency. If you’re concerned about finding cheaper insurance, there are many sources online that can help you find the right kind of insurance for you. Having health insurance can give you some peace of mind that you won’t have big bills leading to financial ruin, and cheaper insurance can keep the costs of that peace of mind down.