How to save money for retirement

Vacations around the world, a condo in Florida, finally having that dream car. These are many ideas people have about retirement, however, due to the current economic situation it is no longer something easy to achieve. The costs of living are higher than a generation ago while the salaries are stagnant. You can no longer count on Social Security, and you need to start saving early on if you are to have a good level of comfort in your retirement. These tips although simple, will help you prepare for your golden years without sacrificing too much right now.

Instructions

Difficulty: Easy

1. Calculate how much you need for retirement. It is not an easy calculation, but if you study the current economic situation, you can make an educated guess on certain costs. Do you plan on buying property? Do you want to do freelance work? Or do you prefer to volunteer? It is important to know how much income you will have, and what it will cover. Make sure you set a certain amount for emergencies, things you did not know you would have to pay for. Experts say you will need around 70% of your income to keep your current standard of living when you stop working.
2. Learn about retirement programs your employer offers. It does not matter whether you plan on retiring 5 or 50 years from now, it could still be helpful. Remember to check what happens when you change jobs. See if you qualify for any benefits from your spouse's plan.
3. 401(K). It is tax sheltered and your employer may match your contributions. It is also automatically deducted from your paycheck, so you don't even have to think about it. Over time, compound interest and tax deferrals do make a difference.
4. Retirement accounts. You can put your money into an IRA you can gain tax advantages. There is the traditional IRA and the Roth IRA. Study both and see which one suits you.
5. Do not run debt. Keep your credit cards free of balance. Try to live below your means. The more debt you have, the less likely you are to save for retirement. Think of interest as free money you are giving your lenders. Money you could be saving.
6. Do not count on the goverment to pay for your retirement. The baby boomers will either break Social Security of they will force such a drastic change upon it, that it will not be recognized. Counting on Social Security is not a risk worth taking. The good news if that if by the time you retire there's something left, then it's even more money for you.
7. Do not put svaing for your child's college ahead of saving for retirement. Have you ever heard of a grant for old age? Teach your kids to save for college themselves with a weekend job and keep informed about grants and scholarships.

Tips & Warnings

• Consider that studies show that the average American spends about 18 years in retirement. This number is expected to grow because of the longer life expectancies.
• Start saving now. The sooner, the better. Do not postpone your retirement savings.
• Never, ever touch your retirement savings for anything. Remember all the hard work you put into saving in the first place.