3 retirement planning essentials
For most, retirement is the light at the end of the tunnel; but if you don’t plan it right, that light could disappear. Solid retirement planning requires you to implement a plan that leaves you with enough retirement income to last you the rest of your years. Unfortunately, it’s easy to underestimate the amount of monthly income you’ll need. A few essentials can keep you on track.
According to the Department of Labor, you need to replace an estimated 70 to 90 percent of pre-retirement income for each year of retirement. The easiest way to do that is to make a target goal and meet it. When retirement planning, estimate your target goal based on your current income and how long you expect to live after retirement. Then factor in extra variables such as medical costs, vacation expenses and fixed costs like owning a home.
Review your retirement planning
Once you have a target goal in mind and your retirement plans are in place, you should review the plan regularly to see your progress. Assess how you’re doing. Once things look good, start factoring in Social Security benefits, future salary increases and the rate of return you’re getting. Inflation and other assets that you have should be factored into your retirement plan as well.
Create a plan
It’s good to have an official plan set in place that you can follow to hit your retirement goals. Eliminate any debts that you currently have and start contributing as much as you can to your retirement accounts. Consider working past your retirement age to contribute more to your retirement and reap the benefits that Social Security offers for those that retire later.