After working for the same company for 20, 30, or even 40 years, you deserve some downtime. Of course, to get that downtime, you’ll need to save for retirement. Planning for retirement can feel overwhelming at first, but with the right tools in front of you, it’s easier than you think.
Start With Social Security
The first thing you’ll want to consider is your social security benefits Franklin Lakes NJ. Typically, your social security retirement benefits will be about 40% of your pre-retirement income. This means that someone who earned $4,000 per month should receive about $1600 per month from social security. Maximum benefits vary based on the age you retired.
Create a Savings Account
If you haven’t already, create a separate savings account for retirement and add to it every time you get a paycheck. The sooner you start saving, the more money that you will have when it’s time to retire. Typically, you should try to save at least 10% of each paycheck for retirement. However, that isn’t feasible for some people. Even if you can’t save 10%, put in what you can. Even saving only $1 a week for 40 years comes up to $2,080, and if you can afford to save $10 per week for 40 years, you’ll have nearly $21,000 for retirement.
Put Money Into an IRA Account
If you’re under the age of 50, you can put up to $6,000 per year into an Individual Retirement Account. You can put even more into it once you’re 50 or older. There are two IRA options available. A traditional IRA and a Roth IRA. Both provide tax benefits that depend on which one you choose as well as what contributions and withdrawals you make.
Whether you’re creating your own savings account, putting money into an IRA, or both, planning for retirement is essential. If you aren’t sure where to begin, consider asking a financial expert for help.