The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Information on this website may not be current. This website may contain links to other third-party websites. Such links are only for the convenience of the reader, user or browser; we do not recommend or endorse the contents of any third-party sites. Readers of this website should contact their attorney, accountant or credit counselor to obtain advice with respect to their particular situation. No reader, user, or browser of this site should act or not act on the basis of information on this site. Always seek personal legal, financial or credit advice for your relevant jurisdiction. Only your individual attorney or advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, contributors, contributing firms, or their respective employers.
Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them. Compensation is not a factor in the substantive evaluation of any product.
Retirement can be an overwhelming and easily ignored concept in your daily and professional life. Instead of avoiding the topic, it’s important to get educated about retirement. Your older boss or already retired parents may not seem like the best source for modern saving methods, but sometimes you don’t need to re-invent the wheel.
Check out our list of old retirement ideas that are still good tips for modern savers.
One rule of thumb that has long been held as fact is that you will need 70% of your pre-retirement annual income in retirement. The actual percentage you will need will likely be a bit higher or lower because everyone starts with different financial situations and has different plans for their retirement years. Whether you plan to go on expensive travels or downsize and be more of a homebody, your specific needs will be unique. Still, as you begin thinking about and saving for retirement, this can be a goal to work toward. Then as you get closer to retirement and adjust your plans, you can also adjust your goals.
Another good goal to work toward is to save $1 million. Again, how much you will need will depend on your current lifestyle, plans for retirement and how much money you make. Some will need to save a lot more than $1 million, while others require much less to live happily and comfortably. A million is a good beginning number to aim for in the early stages of your career. You can always grow your savings from there.
This is certainly an oldie but a goodie: start saving for retirement early. This is because the earlier you start saving, the less money you will actually have to save. By investing money early, you allow that money to earn interest, and the interest on that money to earn interest. It’s known as compound interest.
In the past many employers offered pensions, then matching contributions for 401(k) accounts and now … well some employers don’t seem to be offering anything. But don’t assume that’s true! Find out if your employer offers matching contributions for your 401(k) and if so, make use of it. This is essentially free money and effectively increases your income without increasing your tax bill (until you withdraw funds in retirement).
If your company does not provide a sponsored retirement program, look into directly depositing some of your paycheck into an individual retirement account. Although it may seem that there are fewer and fewer employer-sponsored avenues to save for retirement, you should check out your options.
Image: iStock
March 11, 2021
Personal Finance
March 1, 2021
Personal Finance
February 18, 2021
Personal Finance