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Why Should You Think About Retirement Planning?Submitted by Townsend Asset Management Corp. on July 25th, 2019
If you’ve only just begun your career and are starting to collect a decent paycheck, the last thing on your mind is probably retirement planning. When you’re in your twenties and thirties, retirement can feel light years away, but it will arrive much faster than you can imagine. When it does, you’ll want to be prepared.
And for those in their 40s and 50s, remember that it’s never too late to begin saving for retirement.
Here are some tips for getting started:
- Create a retirement budget. Take a look at your spending habits over the past six months including necessities such as rent or mortgage, food, utilities and automobile expenses. Your retirement plan should resemble your current budget, with adjustments included for cost of living or inflation. Although things may change as you get closer to retirement age, having a solid retirement budget in place, and updating it regularly can go a long way towards helping you meet your savings goals.
- Jot down the various income sources that you expect to receive when you retire. This can be anything from the 401(k) that you’re contributing to at work (if you’re not currently contributing, start ASAP), to monthly social security payments, to any other investments you may have, such as stocks, bonds, or money market accounts. By combining your average expenses with your expected income, you’ll be able to get a better idea of how much you need to save prior to retiring.
- Pay off your debts. If you still have a significant number of debts, concentrate on paying them off prior to retirement. This will significantly increase the amount of available cash you have each month.
- Factor in the cost of health insurance when creating your retirement budget. Remember that not all health care related costs are covered by Medicare, so it’s important to factor in the cost of a supplemental plan. You may also want to consider purchasing long-term care insurance which can help pay the costs should you need long-term or nursing home care.
- Stay on top of your retirement savings. It is important to check in periodically to review market changes and performance details.
- Factor in where you live when determining your retirement costs. There are many states that are much more retiree-friendly than others, and if you live in a more expensive state, you may want to consider relocating to an area where your money will go further.
When you make the decision to retire, you’ll want to be able to enjoy your life. Planning for retirement will go a long way towards helping you achieve that goal.
*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2014-2019 Advisor Websites.