Ready to retire? Most people aren’t. So, how much will you really need in savings to retire? When planning for retirement there are several variables regarding your retirement expenses.
Things to Consider:
- The cost of living in your area
- Healthcare costs
- How long you will live.
- Do you own your house free and clear?
- What is your health like?
- What type of insurance do you carry? ‘
- Do you want to travel or enjoy an expensive hobby?
A 2018 Government Accountability Office study found that nearly one-third of Americans age 55 and older do not have any retirement nest egg, even a traditional pension plan.
According to Investopedia If you are earning $50,000 by age 30, you should have $25,000 banked for retirement. By age 40, you should have twice your annual salary. By age 50, four times your salary; by age 60, six times, and by age 67, eight times. If you reach 67 years old and are earning $75,000 per year, you should have $600,000 saved.
The Motley Fool financial website suggests planning for around 30 years for retirement saying one in four 65-year-olds will live past 90 and one in 10 will live past 95.
Vanguard states a 65-year-old man has a 41 percent chance of living to age 85.
Rob Berger of Forbes magazine suggests you need to save 25% of your yearly expenses to be able to retire in comfort.
Not saving because you don’t have additional income to spare?
Here are a few ways to ease into saving for retirement.
- Employer Plans – If you work for an employer offering a retirement plan, contribute to it! Most contributions to employer plans come out of your check pre-tax and many employers will match your contribution. As a result, your retirement will grow even faster.
- Individual Retirement Arrangement (IRA) – There are different types of IRAs. Some are for employers and some are not. Your IRA can invest in stock-market correlated assets or if you use a Self-Directed IRA, your IRA can invest outside the stock market into assets like real estate, precious metals, notes and more. Contribute to yours.
- Social Security – These benefits are payments made to qualified retirees and disabled people, and to their spouses, children, and survivors. You can learn what Social Security benefits are due to you HERE
- “Keep the Change” – Banks and other companies like “Acorns” will help you save your spare change by rounding up your purchases to the nearest dollar and depositing those into a savings or retirement account. If you do not have a budget, you need to create one. See if there are areas where you can reduce expenses.
It can seem daunting to plan your retirement, but it will happen to all of us. Taking steps today to protect your future is the prudent choice. We are here to help and to answer all your questions about planning for retirement using a self-directed retirement account. Call us at (866) 447-6598 or contact us by email at info@uDirectIRA.com