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Retirement Ready?

Most of us dream about retiring from our job and living out the rest of our days doing whatever we want. However, as lovely as that sounds, most of us don’t have a plan on how to make that a reality. A recent survey by the Employee Benefit Research Institute (EBRI) reported that over half of respondents said they and/or their spouse have not calculated how much they need to have saved up in order to live comfortably during retirement. The same survey indicated that 57% have less than $25,000 in savings and investments. “It’s surprising to think that over half of Americans are not close to having the savings needed for retirement”, states Jana Castanon, spokesperson for Apprisen. “I don’t think many people realize that you need at least 70% of your income to retire comfortably. With savings balances so low, it almost seems impossible to get there. However, it’s never too late to start saving, regardless of your age.”  Your retirement income needs to come from Social Security (which covers approximately 40% today), pensions and savings. With the average age of retirement being 62 and typically lasts 18 years, you can do the math as to how much you would need to save. Apprisen offers these tips to help you get started:

  • Determine your retirement lifestyle. Where do you see yourself living? What about travel or hobbies?  Do you envision yourself working part time? Do preliminary research on estimated costs for housing, possible medical needs, entertainment, etc.
  • Cut down on your expenses. Learn how to do without today so you can live comfortably tomorrow. Create a monthly spending plan and put any additional dollars in an IRA or Roth retirement account. Verify how much you can deposit into that type of account based on your age, marital status and income. However, since you don’t know what challenges life may deal you, make sure you have an emergency account established first with a least 3 months of income saved.
  • Enroll in employer sponsored plans. If your employer offers a 401k plan, take full advantage. Many offer match savings up to a certain amount of your contribution. By failing to participate, you could be losing out on money. If you are unable to start adding to the account today, on your next pay raise take at least one percent and begin saving. Increase your contributions annually thereafter with each increase of income.
  • Consider postponing retirement. Working longer means extra years of saving for retirement and a larger Social Security payment. According to the Social Security Administration, for every year you wait after your full retirement age, your Social Security increases by 8%.
  • Consult a financial planner. A financial planner will be able to map out a strategy to help you meet your retirement goals. However, make sure the person you are working with has your best interests in mind and has experience in retirement investing. Consult the Certified Financial Planner’s website, www.cfp.net, for information on finding a planner in your area or ask family or friends for recommendations. 
  • Estimate your monthly retirement income. How much monthly income will you need during your retirement years?  To begin, find out how much in Social Security you will be receiving. Go to the Social Security office website, www.ssa.gov, and create an account to receive an estimate of your retirement, disability and survivor benefits. Then you can use an online calculator, like the one on the AARP website, that will help you figure out how much more you need to save in order to reach your goal.
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