When the time comes to retire, will you be ready?
You’ve probably heard that you should have saved at least $1 million to $1.5 million, or 10 to 12 times your current income. If you’re thinking about retiring, experts say to start planning well in advance of the actual date. You’ll need to think about how much money you’ll need each year after retirement, where you will live, and how long you might live, based on your current health status. Estimating longevity is challenging, but surprisingly, a 65-year-old today might live to be 95!
After retirement, you’ll probably spend less on debt and work expenses like gas and clothing; however, financial planners suggest you’ll still need at least 75% to 85% of your current income to live on. The sources for your income might include a pension and/or Social Security, but the rest will come from savings.
If you have a handle on what your living expenses are each year, it's easy to determine how much income you’ll require for the rest of your life. So, what’s your number?
Most people think retirement age begins at 65, but it also can begin when you start collecting Social Security benefits – between ages 62 and 70. However, MSN surveys reveal that more than half of American workers between 30 and 50 plan to retire before they’re 65. That might prove easier said than done. For a little help, visit NewRetirement. They provide answers and advice for 14 of the most common retirement inquiries. There’s also a retirement calculator to determine if you will outlive your money; a NewRetirement planner; retirement age options; and information on when and how to retire comfortably.
As part of VacationLand’s financial literacy programs, we have an entire playlist of videos devoted strictly to retirement. You can explore topics such as Social Security, investments, estate planning, and much more.
Many American retirees agree that they could have planned better before calling it quits. Along with Social Security, laying solid groundwork beforehand may prevent some surprises down the road. VacationLand Federal Credit Union offers our members a variety of IRA choices to help you invest in your future. An IRA Share Savings Account, an IRA Share Certificate, and an IRA Money Market Account all offer competitive dividend rates, tax-deferred options, and they’re all insured up to $750,000. And, effective February 1, 2019, our dividend rates for 24-month and 36-month term IRAs are 2.60% and 3.00% APY respectively. We’re here to help your IRA investments work harder for you.
Along with IRAs, we have other saving options, including Share Savings Accounts, Club Accounts, Money Market Plus, and Share Certificates.
VLFCU is Here to Help
We’re not clairvoyant, and there’s no way to know what will happen to interest rates down the road. Solid advice from your financial planner, along with making your money earn the most it can, will make you feel good about your future. Most importantly, just start doing something. Don’t wait until the reality of retirement sinks in and you’ve discovered you haven’t saved enough. Start taking steps today to ensure you’re on the right track for obtaining your goals.