Money Decisions That Will Affect Your Retirement

Retirement is a concern for many people who like to spend it comfortably. More than hoping for a comfortable retirement, what you can do is prepare for it. How you may try to do it is up to you and what your personal circumstances will allow. As you work on to establish a retirement fund, there are also other money decisions that you can make that may eventually affect your future retirement. Here are some of them.

The time you decide to save up for retirement.

Your retirement depends on how much you are able to save up on your nest egg. You can either have difficulties over saving or have an easy experience over it. It is usually determined at what age you start saving up for your retirement. Some people have the foresight of considering their retirement situation early. So they start to save up at an early age as well. But most people usually start saving up for retirement quite late in life. This gives them less time to do so, making it quite a challenge for them to come up with a retirement fund sufficient to address their needs on their later years. The time when you decide to save up for retirement will greatly affect the outcome.

The age you plan to retire.

The age you retire will have a significant impact on your retirement fund. If you retire early, expect to have a tighter retirement budget for spending. An early retirement does not just give you a chance to enjoy the retirement lifestyle early, it also will extend the years that you spend on retirement. You should be aware that you no longer have a steady income to depend on when you retire. You depend on your retirement fund for your daily expenses. The earlier you retire, the earlier it is that you try to dig into your retirement fund. Doing so can affect how long your retirement fund will last.

The time you decide to collect Social Security.

One of funds that you will depend on during your retirement includes your Social Security payments. Some people opt to collect payments before their full retirement age. When they do so, they usually get a discounted rate that can be as much as 30 percent lesser than what they can expect at full retirement age. The discounted monthly payments are set until you die. This will result in not getting the full benefits of your Social Security retirement payments. Try to sign up for your Social Security once you have reached full retirement age of 66 in order to get the full benefits. In addition, if you defer receiving payments until you reach 70 years old, your Social Security payments increase by 8 percent each deferred year.

 

Posted by Ardent Editor on Jul 11 2013 in Financial Planning Tags: , , , , ,

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