When you think of retirement, if you have even thought about it at all, it might seem like this daunting, unattainable thing that only exists in dreams. BUT… in reality it's not as daunting as you might think. So if you have thought about retirement, you likely think of ways to save and how to determine if you have enough money in order to retire on time. While these issues are important pieces of the puzzle, they’re exactly that – pieces of a puzzle that interact with many more pieces. Waiting to arrange the pieces to your financial puzzle only makes it harder to put the pieces together, no matter where you are today. Since time is one of the most important parts of your puzzle, start thinking about all these different puzzle pieces and how they need to fit together for you.
Here are several important pieces to consider as you are in your pre-retirement stage of life:
- While retirement may still seem years away, start now
The earlier you can start, the better. When you start early, you can take advantage of compound earnings and have more potential for your savings to grow overtime. The dollar you save today is more important than the dollars you save in 5 or 10 years. - Know what you want retirement to look like
Do you want to keep living how you do now? Will you want to spend more on hobbies or travel since you’ll have more time? Spend less and live simply? You must have a vision for the life you want to have so you know how much to save. If you are like most of our clients in this stage, and cannot look past college and other nearer term goals, start with what you spend today and use that as a target to aim at. You can always adjust and refine over time. This leads us to the next point. - Figure out how much money you’ll need
There are plenty of online calculators that help you factor how much you need to save. In order to make sure you are saving the right amount, you need to know the exact number. Take a few minutes to see where you are in your journey.
- Choose the best retirement plan for you
There are several different retirement plans you can choose and depending on your type of employment. Depending on your personal situation, you might have limited options. Do your research to determine which retirement plan is the best for you and your situation. Here’s a breakdown of retirement plan options.Here’s a breakdown of retirement plan options.
- Don’t touch your retirement savings
There’s a penalty when you take out your savings from your retirement funds before the allotted time. Make sure you’re saving enough elsewhere in accessible areas so that if something unexpected happens, you have money you can access.
- Max out your retirement accounts
Never leave money on the table. Whether your employer will match your contribution to a certain amount or you’re trying to reach the max amount to contribute to your ROTH, always do the most that you’re able to.
If you’re not sure where or how to get started, please reach out to us here and we will help you out.
