Retirement is more than taking a permanent break from work every day. Some people say they are busier in retirement than when they worked full-time. However, few people spend their retirements sitting in their rocking chairs, waiting for direct deposits. Instead, retired people spend their time volunteering, learning something new, caring for family members, traveling, and engaging in other active pursuits.
Being an active retiree requires resources. Golf rounds, lunches with friends, and getaways can put a dent in a retiree's finances. Medication, food, and the expenses of maintaining a home also mean that enjoying a financially comfortable retirement requires some thought and planning. Whether you are near retirement or just starting your career, a retirement advisor can offer guidance in planning for retirement.
If you have not begun planning for retirement, the time to start is now. When saving for retirement, time is money. Begin your saving and investing early, and you will have more money when you are ready to give up working every day.
If your investment goal is to have 1 million dollars by age 65, you need to invest just $286 a month if you start at age 25, but if you wait until age 35 you will need to invest $670 a month to arrive at the same place. More than twice as much, that’s the power of compounding.
When an employer offers a retirement plan, that can be a great opportunity. Some employers offer 401K plans where you can deposit a portion of your paycheck and invest in mutual funds, stocks, and other products. Some companies may match your contributions, which can be a win-win for you. Others offer profit sharing, meaning employees get a portion of the company's profits. Employees can save these funds for retirement.
Unless you have a background in retirement planning, it is good to seek professional help to start saving and investing for retirement. As the familiar saying goes, "you don't want to put all your eggs in one basket." While a savings account is safe for stashing money for a rainy day fund, you will want to think bigger to grow your money for retirement.
In addition, you will need to think about the risk you are willing to take. If you don't mind the risk for a larger reward over the long term, stocks might be an option. If you are closer to retirement and would rather be more conservative in funding your future, maybe a Short-Term Bond Fund or Certificate of Deposit will work. Establishing an IRA or Roth IRA can be a great place to make your investments grow until you retire.
The key is to connect with retirement planners who can help you make informed decisions that will pay off during your retirement years.
Retirement planning can be overwhelming when you don't know where to begin, which is why working with a financial planner makes sense. Your retirement advisor can explain the nuances of retirement planning and help you understand how much you should be saving now. They can also show you how to maximize Social Security, select investment products, roll over your 401K, or convert a traditional IRA to a Roth.
Regardless of your age, you don't want to procrastinate on planning for retirement. Call us today, and we can show you how to get started.
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