Planning for Retirement
Did you know that most people spend more time planning their next vacation than their retirement? Reviewing your current assets and future savings plans will help ensure that you have the income you need to have a comfortable retirement.
How much will I need in Retirement?
This will depend on a couple of factors:
- How long you will live?
You don't want to come up short. Develop a plan that assumes you will need 25 years of retirement income. - What kind lifestyle you plan to live.
Some expenses may go down in retirement - mortgage, clothing for work, etc - but others will go up - travel, medical costs, etc. Most financial experts suggest you'll need approximately 70% of your current gross income to maintain your current lifestyle in retirement.
For a more detailed calculation of how much you'll need for retirement, click here.
Where will my retirement savings come from?
The majority of retirement income comes from these sources:
- Social Security
- Pensions
- Savings
Calculating how much you can expect from Social Security and Pensions will help you plan how much you need to save on your own.
Can you count on a Pension?
Most employers have replaced traditional pension plans with 401(k) plans. Plus the trend of changing employment more frequently does not give employees the opportunity to build reserves in company pension plans.
Can you retire on Social Security?
The average annual Social Security benefit is $10,500. You should receive an annual statement of Social Security income after age 25 or request one at any time by calling 800-772-1213 or going online to www.ssa.gov.
Set your savings goals
Begin by adding the balances on all your current retirement fund sources to determine what you have so far. Next, set a savings plan. Retirement savings can come from a couple of sources:
401(k) Plans
If your employer offers a 401(k) or similar plan, make sure you are taking full advantage especially when it comes to free dollars. Most employers will match a percentage of your contributions - sometimes up to 5%. It's like getting a monthly bonus. Be sure you are contributing enough to qualify for the company match.
Personal Savings
Even with employee savings plans, you will probably need to build your own savings for retirement. Make your savings goals more digestible by breaking them down to weekly or monthly contributions. While you may not think you can save an extra $25, $50, or $100 dollars a month, simple changes to your current lifestyle can create additional monies to save.
Metro offers a full range of retirement savings solutions. Click here for more details.
