According to the U.S. Department of Labor, the average American spends 20 years in retirement, but fewer than half of all Americans have calculated how much they will need to save for retirement.
How much you’ll need: The AARP Retirement Calculator offers a personalized snapshot of what your financial future may look like. All you have to do is answer a few simple questions, and it will help you determine the amount of money you’ll need to retire. You can also use the Social Security Retirement Estimator to estimate your Social Security benefits.
How to save: Saving for such a large goal can seem daunting, but it’s OK to start small and gain momentum. Once you start to examine your spending, you’ll likely be surprised at all the areas you can save. For example, maybe you cut out going to the movie theater as often, or cancel your cable in favor of online streaming for TV and movies, which can produce a significant monthly savings. Perhaps you can eat out less often and make meals and drinks at home..
America Saves offers 54 Ways to Save, plus simple tips for creating a budget and more.
The U.S. Department of Labor also offers a variety of tips and resources related to retirement savings. Make saving for retirement a priority. Then, create a plan and stick to it.
Where to save: If your employer offers a 401(k) plan, this can be a great opportunity for retirement savings. Learn the details, and maximize your investment. You can also put money into an Individual Retirement Account (IRA). While different plans come with distinct features, these types of savings are generally best for retirement, as they allow you to defer taxes.
While pensions are not as common today as they were in decades past, if your employer does offer one, make sure you understand how it works and what benefits you’ll receive.
In addition, it’s wise to educate yourself about basic investment principles during your savings journey.
With the links provided and resources below, we’ll be able to help you retire when you want, the way you want.