Retirement Planning Dreams

You are never too young to start planning your retirement. No matter if you want to plan an early retirement, or simply plan your retirement to give you enough money to live comfortably, you should start planning your retirement as early as possible. Even if you only put aside a modest amount of money per month, or even one lump sum per year, you will absolutely make a difference in your lifestyle as a mature adult.

Whether you want to retire in your current home or move to a warm and tropical location, planning your retirement is an important part of life. For the best chance at a successful and comfortable retirement, make sure you are planning your retirement early and on a continual basis. Consider these tips on planning your retirement to help you prepare for a fulfilling future where you no longer have to work.

1. Set your goals for retirement now. Don’t put it off – the sooner you know what you want out of retirement, the better chance you have of achieving it. Make a commitment and write down your goal. You’ll have a much better chance of achieving it.

2. Max out on your 401k to earn the full company match. The money matched to your contributions in your 401k by your employer is free money. Up the ante and make sure you contribute at least the minimum amount to collect your company’s full 401k contribution.

3. If you can further increase your retirement savings percentage comfortably, do. The IRS allows you to contribute the lesser amount of $49,000 or 100% of your salary, so you should set aside as much as you can, even if it is on the lower amount, like 10 or 20%.

4. Reduce the amount you spend in interest for your credit cards, car payments, mortgage, etc. The sooner you can reduce and eliminate debt, the sooner you will have more money to set aside for investments and your retirement planning.

5. Estimate how much money you will need for expenses in retirement. Get informed about how much you can save now and how that translates into your retirement funds. When planning your retirement, use a retirement planning calculator to help you decide how much you can comfortably save for maximum benefit later in life. Do your best to meet or exceed that amount consistently.

6. Set your sights on a long retirement. If you are planning an early retirement, you will probably have to save for your retirement more aggressively. Vanguard recommends saving for a retirement of at least 30 years.

7. If your employer doesn’t offer a 401k (or if you have already maxed out), invest in an IRA. Planning your retirement is important and no matter how you do it, you should make a commitment to save as much as you reasonably can afford.

8. Stay tuned into your Social Security statements. While things aren’t looking as promising now as they were when we were younger, we should all ideally be entitled to some retirement funding from our Social Security contributions. Planning for your retirement means you should be well aware of all the possibilities and all of your options.

9. Consider taking greater risks in your retirement portfolio when you are young, and lessening the risk factor as you grow closer to retirement age. You can lean on the investment company hosting your retirement accounts for retirement planning advice.

10. Avoid borrowing from your retirement funds. Don’t give into the temptation to borrow from your retirement accounts in order to pay off your house, pay for your child’s college, etc. Keep good discipline and avoid touching that money until you are ready to retire (unless you absolutely must due to a true family emergency). If at all possible, don’t touch that money!

Remember, these are just guidelines and tips to help you in planning your retirement. For best results, consult your financial adviser or a retirement counselor to help you make decisions about your retirement portfolio and other aspects of planning your retirement. In summary of these retirement planning tips, start saving early and don’t touch your retirement savings. You’ll look forward to a long and relaxing retirement to enjoy!

Filed under: Tips & Strategies on February 15th, 2010