3D Advisors has always advocated for those wanting to retire and enjoy their golden years. After a lifetime of hard work, a couple or individual should have the right to leave their employment and enjoy doing the things they’ve always wanted to do. However ideal this idea may seem, actually saving for retirement can be daunting on one hand and downright confusing on the other. Since retirement is so important, the following information can help you plan for your future:
How much should be saved? In short, as much as you possibly can. But by the numbers, experts say that individuals should save between 10% to 15% of their yearly income to go towards retirement. For example: for an individual making $50,000 per year, they should plan on saving between $5,000 and $7,500 dollars per year. These numbers will be affected by marriage status as well as general health. For those with health issues, more should be saved to meet future needs.
Is there a number I should be aiming for? Having 100% of your income when you retire would be nice, the reality is working to save for 70% to 90% of your income. Wile this might seem like a huge cut in pay, as people age, ideally bills will decline. I.e.: the house is paid off, kids have moved out, so bills are lower, etc.
Should I invest my retirement savings? Investing can be tricky, but the payoff can’t be beaten. Instead of investing all of your retirement savings, consider starting with about 10% to start, then gradually increase your percentage based on the investments and products you’re using.
Most employers have already helped you do this by matching investments in a 401K. Many 401K providers will give annual statements and give you opportunities to diversify how they invest for you. Take this opportunity to adjust your investments to earn a higher return.
IRA’s are also a great way to invest and save for the future. With the attractive tax breaks, especially with Roth IRA’s, these are a good option for long-term retirement savings.
Annuities, like IRA’s, are powerful saving and earning products perfect for retirement. Unlike IRA’s, annuities have the ability to earn more over a longer period of time, but they are subject to stock market fluctuations as well.
In short, start now to save for a bright retirement.