Planning for retirement is essential for maintaining a good quality of life and achieving a financially comfortable future. Knowing how to create a retirement plan involves several steps that require commitment and financial discipline to meet your retirement goals, from figuring out when and how much money you’ll need to retire to exploring the types of retirement plans available.
This post will guide you in creating a retirement plan to help you achieve a secure future.
How to Create a Retirement Plan
Determine when you want to start planning for retirement
There’s no better time to start planning for retirement than now. It’s never too late or too early. However, there’s an advantage to planning your retirement early because you’ll have more time to make your money grow. If you already have something saved up for retirement or general savings, keep going!
Figure out your retirement needs
When do you want to retire? On average, men retire at 65, while women retire at 63. Some retire early, typically any age before 65, due to unexpected reasons like health complications and work-related issues. Several things could lead you to retire early, so planning ahead is highly advisable.
Additionally, you should also have an idea of how much money you’ll need to retire. The amount of money you’ll need in retirement will depend on your current income and expenses. According to expert financial advisors, you’ll need about 70 to 90 percent of your pre-retirement income to keep your current lifestyle after you retire.
To estimate how much you’ll have to save for retirement, try this Retirement Calculator.
Understand the cost of living
Are you retiring in Gwinnett County? Understanding the cost of living in the area you’re moving into is crucial in preparing for retirement. You’ll need to take into account the housing costs and your budget for monthly mortgage payments or rental costs if you’re renting. Another significant cost to consider is healthcare. Meanwhile, daily living expenses in Gwinnett County are estimated at $1391 monthly to cover the basics (food, transportation, and internet).
Maximize retirement plans
If you’re employed, take advantage of employer retirement plans such as the 401(k) and 403(b) plans. These retirement plans allow you to open an investment account to your liking and contribute a percentage of your income. It has many benefits, including tax advantages wherein you won’t have to pay taxes for the money you contribute or the investment gains until you withdraw it in retirement. Another is employer matching, meaning your employer can match the amount of money you contribute up to a certain amount, doubling your total contribution.
Care That Goes Beyond
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