There are lots of options and it’s never too early to start planning ahead. Here are steps to create the kind of retirement you want.
Create a strategy
Think about where and how you’d like to live in retirement. Get financial advice from your Human Resources (H.R.) Dept., financial planner, banker, tax advisor, insurance agent, and others.
Set a $ goal
Many experts recommend that you aim for 75-85% of your pre-retirement income after you’re retired. How much money you’ll want to have for retirement depends on the lifestyle you’d like to enjoy.
Consider 3 key factors
As you set your savings goal, remember that you don’t want to outlive your savings. Consider your cost of living, how many years you’ll be retired, and what your health care expenses are likely to be.
Don’t bet on the federal government’s Social Security program to fund your “dream” retirement. In December 2006, the average monthly benefit was $1,044. That’s just over $12,500 a year.
Use the 4% rule
Many studies indicate that for every dollar you want to withdraw annually during retirement, you should have at least $25 in assets set aside.
Note: The length of your retirement may equal the number of years you were in the workforce. You may need to support yourself financially for a retirement that lasts decades!
See Planning Your Future in the Hands on Banking Adults course for much more about retirement.
Click the Next button to learn more about the 4% Rule.