There is no one particular time to start your retirement planning. You can do it from the day you start working or from a later age. It is your proclivity. But the sooner you start, the better. In your early years, it is easier to always think that retirement is far away.
However, time flies and one day we all realize that the time to hang up our boots and jackets has finally arrived. And those folks who chose not to plan well for retirement earlier on are most likely to find themselves in financial trouble and extremely stressed out because their best working days are behind them and they still have many more years left on this planet to live. So start planning early!
It is pretty hard to forget about but it is easier to ignore when you are younger. The thing is, the longer you put this off the more you are going to have to save later on which could be difficult for a number of reasons. The simple fact is, if you do not save for retirement you may not be able to. Not everyone can perform so terribly in their job like Lois Lerner and Barney Frank did and be able to retire comfortably. Though most people are more honest than those two but this is another topic.
And do not think you are going to end up with boat loads of cash like Louis Winthrope III and Billy Ray Valentine did the hilarious movie Trading Places. That is just illogical!
Now is the Right Time
As you work and pay off loans and bills you need to contemplate how much you should be saving for retirement. As life changes, your plans too can change. But staying on track is vital. Once your familial responsibilities set in (you will most likely have a family), you still need to continue saving.
How much is needed to retire?
The thumb rule is to put aside 10 to 15% (according to CNN Money and do not worry about this being fake news since this information by CNN is also supported by other sources) when you are in your 20s but you should save as much as you can. This harkens back to what was said before, if you do not start saving early you are going to have to make up for it later on in your life.
You also have to maintain favorable credit rating (unless you are one of those strange ducks like me who just pays for everything in cash and does not go out much but since most people are not like this, play the game and maintain your credit) and manage your debt burden if any, carefully. A poor credit score can prevent you from obtaining reasonable loan rates, leaving you with less amounts of money to save.
Planning Your Future Finances
If your current employer offers you a 401(k) plan, sign up for it and have contributions deducted automatically from your monthly paycheck. If your employer matches your contribution with the same amount, you only stand to gain in the long run. It pays off when you accept superannuation.
If you are changing jobs, consider rolling over your 401(k). You can transfer your employer-sponsored 401(k) funds into an IRA or Individual Retirement Account as you switch jobs. This will give you a clear picture of how much you have in reserve after working for so many years and what needs to be done to enhance it further.
For those in their 50s, retirement isn’t far off (though it could be which is the point here!). It’s time to take a look at your retirement savings and to evaluate whether you are on the right track or if you should begin to start tucking more away. If you need a qualified financial professional to advise you on reducing your tax burden so that you can save more for retirement then you should consider getting one. This financial advisor can also offer you salient advice on how much you should be investing and what you should be investing in.
You could even ask your employer to deduct more from your pay as your earnings go up, provided they are willing to match your contribution every month. Moreover, catch-up contributions are always useful for making up for any shortfalls you may have in your portfolio. Evaluating your monthly expenses is also critical. You do not want to be spending too much on a car or a home and so on. You also have to pay attention and consider any interest rates on loans that you are contemplating taking on via a house or car and you should never borrow to pay for furniture. That is a terrible move to make!
Clear thinking and clearer vision are the two main facets for successful retirement planning. And the sooner you start, the better. There’s no greater relief than knowing that you are well provided for as you put your feet up and relax knowing you made the right moves in life.
