How to Prepare For Retirement - 10 Ways

Member

By georgelarson
User-Submitted Article

Article Rating:

(19 Ratings)

Prepare for retirement should be a happy adventure, not a financial burden.

Retirement Plan - The average person spends 18 years in retirement. Half of those planning on retiring have calculated how much money they will need to do what they want to do in their new 'free time'. Here are 10 ways to prepare for retirement.

Difficulty: Moderately Challenging

Instructions

Things You'll Need:

Know what you want to do once retired.
Plan out how you will be financially ready to take on retirement.

Step 1

Prepare For Retirement

Know what you need for retirement. Plan on needing 70% of your pre-retirement income to maintain the style of living you are accustomed to. If you plan on traveling, golfing, or other activities add those expenses into your needs assessment.
Step 2

Retirement Social Security Income

What will you receive from Social Security. I know, most of you think Social Security will not be there for you when you retire. I am not saying one way or the other but plan on receiving 40% of your pre-retirement income. That leaves 30%.
Step 3

Retirement Pension or Profit Sharing Plans

Does your employer have one? Find out how much your benefit is by asking for a individual benefit statement. As you move from job to job keep all of this information together. Does your spouse have benefits? Keep close track of all of these benefits.
Step 4

Prepare For Retirement With Tax sheltered savings plans.

The most common is the 401(k). Participate in this, even though you will receive less in your check, because over time this will accumulate. Your empoyer may match your investment and with interest and tax deferrals it will grow. You can take your money with you or leave it when you change jobs.
Step 5

Retirement Planning

If your employer does not offer a retirement plan there is still hope. Simple plans can be set up, easily, by some employers. Contact the IRS and ask about choosing a retirement solution for a small business.
Step 6

Retirement Planning With An IRA

Individual retirement accounts will help you save for the future. You choose a traditional IRA or the new ROTH IRA. Ask your financial advisor which is the best option for you. Either way you can upt up to $4,000 a year into these accounts. Another great way to see your money grow.
Step 7

Prepare For Retirement With Personal Savings Accounts

Deposit into your savings account just like it were a monthly bill. Then DON'T TOUCH IT!!! It is there for a 'rainy day' but keep your hands off of this money for things you 'want'. Treat your savings account this way and watch it grow.
Step 8

Prepare For Retirement By Setting Goals

You know how much you need to retire so set goals for each of the above options. Know how much you can afford to contribute to your 401k, IRA, and savings plan then stick to it. As your financial income grows, so should your contributions. This is you taking care of you.
Step 9

Financial Knowledge is Key To Prepare For Retirement

Inflation will play a significant role in retirement finances. Understand that the type of investments you make play an important role in how much you save and how long that will cover your retirement with inflation in the equation. Know how your all your plans are invested and keep track of your benefit statements. This is something you need to consult your financial advisor on.
Step 10

Retirement Planning With Knowledge By Asking Questions

To get practical advice talk to everyone who is playing a role in your retirement plan. This includes your employer, bank, union, former employers and financial advisor. You need to understand all the saving options available for you and you need to start saving now.