Regardless of age, retirement planning is an essential part of preparing for the future. To set yourself up for a stress-free retirement, follow these 5 simple steps.
The first step to achieving any financial goal is to learn strong saving habits.
Start by mapping out where your money goes every month. There is probably something you could cut back on.
- Understand the basics of investing
Saving money every month is a good start, but if you want your money to work for you and not go down in value over time, you should learn how to invest.
Find a book or online resource about investing for beginners. You’ll learn how to reduce risk and maximize growth.
- Determine how much you need to save
To truly prepare, you’ll want to calculate how much money you will need to live comfortably for at least 20 years after you stop working.
A middle-class American can expect about 40% of this amount to be covered by social security benefits. The rest you’ll need to save and invest.
- Take advantage of your employer’s retirement savings plan
One of the best ways to invest is through a 401(k) or an Individual Retirement Account (IRA).
These options may shield you from some taxes when you withdraw the money. Your employer might also contribute some money every month.
- Stick to your retirement plan
Congratulations! If you followed the steps above, you now have a retirement plan.
For many people, however, the hardest part of preparing for retirement is sticking to the plan. As new expenses come up, it will be tempting to stop saving and investing every month. Resist this temptation.
To learn more about retirement planning or to secure a low-interest loan, contact United Credit Union today.
