According to the US census bureau, 50% of women and 47% of men aged 55 to 66 have no retirement savings. While other surveys suggest that 36% of people believe they do not have enough retirement funds to manage their monthly expenses once they retire.
On average, Americans think they need to have around $1.2 million to retire comfortably, and many people have nowhere near this figure. Planning for retirement is something that people need to be doing from as early an age as possible, be it a specific retirement plan, via a 401K or savings account, or cash under your mattress (not recommended).
If you are unsure how to start building wealth for retirement, read on.
Talk to an Advisor
A Financial Advisor can talk you through your options on many different topics regarding wealth, retirement, investments, and more; they can help you to get a handle on your finances and look at what you need to be doing so you are financially repeatable and are able to make the right investments for your financial health.
This will give you a clearer idea of what your options are, how much you should be looking at saving and investing, and what the best long-term investments for you will be.
Assess Your Needs
Everyone will have different needs when they retire, and while it might not be feasible to predict exactly what those needs will be for you, after all, life is unpredictable, so you can make an estimated guess on what you want from your retirement now. You can revisit these needs should you experience any changes or want something as you get older, but knowing things like what age you would like to retire, where you want to retire to, what kind of lifestyle you want, and potential healthcare and support you might need. Some people like to remain in their homes, others would like to retire to a retirement community somewhere hot, or you might find more out there options that work for you, like one couple who found it cheaper to travel on cruise ships for their retirement than actually pay for accommodation.
Know Your Benefits
Social security currently covers around 40% of pre-retirement finances for many people, although this is subject to change in the future. Knowing what will happen when you retire and what you will be entitled to is essential so you can financially prepare more easily. It is estimated that people need 70-80% of their pre-retirement income, so if you are entitled to 40%, you need to make up the rest to ensure a good standard of living equal to or as close to how you are living before you retire. If you don’t have savings or enough to cover your costs, you might need to think about working past retirement age to help you support yourself and keep your savings untouched for a while longer.
Planning for retirement is something anyone can do at any age, but the earlier you get started, the more wealth you can accumulate when you decide it is time to retire.