If you hope to retire someday, you need to start planning today. Whether you are in your early 20s and just getting started with your career or in your 60s and already looking forward to Social Security, having the right retirement strategy can make all the difference in the world.
Whether you are looking for smart retirement strategies in Sun City AZ or trying to maximize the value of your pension in Detroit MI, here are some smart saving tips for every phase of your life.
Retirement Planning in Your 20s
Your 20s is the time to get started in your career and start planning for your retirement. If you have a 401(k) plan at work, sign up and start saving as much as you can afford. Try to ramp up your savings every year to keep yourself on track.
Now is also the time to maximize your earning power by furthering your education and working hard at your current job. Getting the attention of the boss, getting as much training as you can and volunteering for assignments can all help you land promotions and raises.
Retirement Planning in Your 30s and 40s
Your 30s and 40s will most likely be among your chief earning years. Make the most of those earnings by maxing out your 401(k) contributions and putting extra money in a traditional or Roth IRA.
If you do not think you can afford to put money aside, take a close look at your budget and look for simple ways to cut back. Something as simple as forgoing that morning latte could give you hundreds of extra dollars a month — money you can devote to your retirement plan.
If you choose to work with a financial planner, look for one who will take a fiduciary interest in your account and provide advice based solely on your needs. Be sure to check out the track record of your investment advisor and make sure they do not have any outstanding issues that could cloud their judgment and your results.
Retirement Planning in Your 50s
Now is the time to assess your situation and see where you stand. Gather your financial statements – from your 401(k) balance to your bank and brokerage accounts. Count it all up and see how much you have saved, then use a retirement income calculator to see how much more you might have to put aside before you can retire.
Do not be discouraged if your current savings balance falls short of the ultimate goal. You still have plenty of time to ramp up your savings and boost your investment returns. Putting additional money away now can pay off big in the retirement years to come.
Retirement Planning in Your 60s
Now is the time to start planning your Social Security strategy and laying out your sources of retirement income. Depending on your situation, it may be better to put off receiving Social Security payouts, since delaying the start of payments can substantially increase the amount you will receive.
Now is also the time to determine your other sources of income in retirement. If you have a pension coming, calculate how much you will receive and add it to your estimated Social Security payments. Then think about how much you will need to live on and develop a strategy for tapping your accumulated nest egg to make up the difference.