Do you know the best time to start planning your retirement?
Whatever your age, if you haven’t started planning your retirement, there is no time like the present. The earlier you start, the less stress you will have and the less you will have to set aside each pay period. Ideally, you will start planning in your early 20’s. Even at the simplest levels of calculation, it’s clear that starting in your 20’s as opposed to starting in your 40’s would mean that you can contribute half as much each pay period to reach the same retirement level in your 60’s. Add to that the compounding interest and the advantages of starting early are even more clear. Beth starting contributing 10% of her paycheck to her 401(K) as soon as she starting working. The fact is that we never really noticed that the money wasn’t there.
At the end of the day, though, your individual contribution should be based on your needs in retirement. Are you going to work part-time during your retirement? Are you planning to live it up? Are you going to travel frequently? How much money are you really going to need? Check out this retirement budget calculator for some help with this.
There is so much advice out there for people who are interested in planning for their retirement. Should you invest in stocks or bonds? 401(K) or IRA or both? Roth or Traditional? Check out Planning for Retirement from CNN Money for more of that information. Or you can contact a financial advisor for information and solutions specific to your particular situation.
My advice? Just get started. Whether you are putting $50 a week in a savings account or 10% of your paycheck into a 401(K), just get started. You can sort details out as you go along, but if you spend years planning how to get started, you may just miss the opportunity.
Just get started!
Do you have any advice for people who are planning their retirement? How did you just get started? What are your retirement goals?
saminder gumer says
i have started to plan for retirement already and try to maximize the amount i can save now so i will have it when i actually do want to retire.
You know we are lucky that my husband has a great pension through the union. But I have zero retirement set up. I guess I may have to blog forever.
This is a problem which is also prevalent in the UK.
If seniors want a retirement income of say £22,000 (the UK’s average working salary) then they need to accumulate a pension fund of around £450,000. At the moment the average fund is estimated to be around £30,000, some say less.
What is the solution?
-Save more and earlier on in life
-Work part time in retirement
-Move or downsize property
-Take equity release
Sarah L says
When I was working I had the highest amount possible deducted from my paycheck. I started out saving as much as I could. Highly recommended.