Are you prepared for Retirement? 5 Ways to get Ready

Today’s financial post is written by a guest blogger, Patricia Sanders. She is a freelance writer and financial blogger. She writes articles for the Debt Consolidation Care Community and can be reached at sanderspatricia29@gmail.com.

Most of us dream of a retired life without stress and debt — one of financial security. Unfortunately, it doesn’t just happen, it takes work and proper planning. In this post, we will discuss retirement planning and how you can properly plan to secure your golden years.

Why is retirement planning important?

Many people don’t understand the importance of retirement planning and later regret not being prepared for what should be the best years of their life. Why plan? Here are a few reasons why.

Ready for Retirement

  1. To prepare for medical emergencies

Medical issues are quite common in retirement life — as we age, unexpected health issues arise. So it’s important to have funds set aside for medical expenses without jeopardizing your post-retirement nest egg. Insurance coverage and a savings account for non-covered expenses will put you in a great position.

retirement planning

  1. Social security benefits are not enough

Social security benefits are a great supplement, but they’re not enough to meet all expenses in your post-retirement life. Create a retirement fund to cushion your social security benefits and to provide financial protection in retirement.

  1. Working in  your retirement years

If you don’t prepare for retirement, you’ll most likely need to continue working into your retirement years. Unfortunately, health issues can prevent you from continuing work, so savings become important for financial security.

How can you be prepared for retirement?

Retirement planning is not an easy task. It requires years of commitment. Here’s how you can be prepared for retirement.

  1. Set your goals and start saving

First, set financial goals. You’ll get inspiration by reaching goals you set. If you’ve already started, then keep saving and move forward to the next goal. The earlier you get started, the better. By saving early, you take advantage of compounding and let your money work for you.

  1. Assess your retirement needs and craft a budget

It takes planning to ensure you are able to maintain your standard of living after retirement. Start by accessing what your current expenses are and formulate a post-retirement budget. Normally, your retirement expenses will be about 80% of your pre-retirement expenses. Make a detailed list of every expense and track that for a year to ensure your planning is correct.

retirement planning

  1. Take advantage of employer pension plans

Many employers offer traditional pension plans to their employees. Check with your employer to determine if a pension is available and what the plan covers. If your employer does not offer a plan, consider other jobs that may.

  1. Contribute money to a 401 (k) plan

Most employers offer a retirement savings plan (401k) and some match your contributions up to a certain percentage.  If this is offered, max out your contributions because they are tax deferred.

  1. Invest regularly

With each paycheck, invest a portion of your earnings into mutual funds.  Index mutual funds are a great way to mimic the returns of the S&P 500 which averages about 7.5% return per year. By investing regularly and reinvesting all dividends, your investments will quickly compound. Compounding has a snowball effect, your investment dollars begin to grow more rapidly and with 20 to 30 years of this strategy, you will be in a great position for retirement.

Get rid of debt or save for retirement?

What will be your top priority in life: paying off debt or saving for retirement? You should first rid yourself of debt by applying a debt snowball. With the debt snowball, you pay off your smallest debt first, then take the money you were paying for that debt and apply that to your next debt until all debt is extinguished. If your debt is unmanageable, consolidate your debt into a single payment so that you can pay it off with fervor. Once you are debt free, take all of the money you were putting towards debt and apply it to your retirement savings.

About this Blog

Thanks again to Patricia Sanders for writing today’s guest post.  Steve and his wife built a software company, sold it and retired early. Steve enjoys blogging about lifestyle freedom, financial independence and technology. If you like this blog, subscribe here to get an email each time he posts.

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** DISCLAIMER ** Financial Information presented on this blog is intended for informational purposes only and is not meant to be taken as financial advice. While all attempts are made to present accurate information, it may not be appropriate for your specific circumstances and information may become outdated over time. Before investing, do your research and seek professional advice.

 

 

 

 

 

 

 

 

 

 

 

9 thoughts on “Are you prepared for Retirement? 5 Ways to get Ready

  1. Thias @It Pays Dividends

    Fewer and fewer companies offer pension plans now and ones that do keep having to do cuts on their plans. My wife has a pension through a school district and we plan as though we won’t have that money in the future because when you have a pension, you are not in control of that money, someone else is and there is no guarantee that you will get what you have been told you would get.
    Thias @It Pays Dividends recently posted…Dividend Payout #21 – Early Retirement Goes MainstreamMy Profile

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  2. LeisureFreak Tommy

    Without a plan you have to rely on luck to successfully retire. I don’t know many who can just wing it and end up OK. Social Security is going to be there but who knows what flavor will be available once you reach the age of requesting your benefit. That said its still important to use the numbers you know now when making your retirement funding plans and do everything this post has laid out.
    LeisureFreak Tommy recently posted…Has Your Early Retirement Number ChangedMy Profile

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  3. Patricia Sanders

    Thanks Thias, for your reply. Yes, these days pension plans are almost gone. One must invest money on other secured plans.

    Reply
  4. Patricia Sanders

    Hi Tommy, glad to see your reply. I agree with your view. You know, people should wait for the full retirement age to get the best benefit of social security. However, waiting for the full retirement age is difficult for most of the people. If you’re not sure when to take the money, approach to a reliable consultant for help.

    Reply

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