Planning for retirement is one of the largest investments that individuals will make during their lives. In order to retire at a specific age and be able to live comfortably, a savings plan must be developed and strictly followed. The earlier a person begins saving, the better off he or she will be when retirement age rolls around.
There are financial planning calculators designed to help individuals with planning for the golden years. Many of these are available online and require answers to only a few simple questions. Plugging in information such as current age, marital status, current income, desired retirement age, desired retirement annual income, and through what age income is desired will yield the “magic” savings number.
The number reflects how much an individual will need to save in order to have the income desired during the retirement years. A financial adviser can help the individual develop a plan to reach this number. The adviser will recommend various types of investments geared to generating the earnings necessary to arrive at the desired figure.
There are different types of retirement plans such as 401(k), defined contribution plans, and individual retirement accounts. In addition, the adviser may recommend investing in stocks, bonds, or money market accounts. Advisers are highly skilled in working with individuals to develop a realistic savings plan based on factors such as current income, marital status, and age.
Relying on Social Security payments to carry an individual through the retirement years is no longer a given. Even if it does still exist at the time of our retirement, Social Security alone will not provide enough income for most of us. Use a retirement planning calculator in order to determine how much money will need to be saved for the post-employment years. Then meet with a financial adviser to set up a retirement savings plan and start socking away the money.