Facts About Retirement

If you’re already thinking of your retirement then one of the things that might have crossed your mind is the question of whether you will have enough savings when you retire. I know that what you want to hear is "yes, you do", however, more often than not the "real" answer to that question is a resounding "no." If you want to be precise, you can compute it by yourself. There a number of free online calculators that will help you determine if your current retirement savings plan will be enough to get you that secure and happy retirement that you have been dreaming of for months or even years.

There are a lot of factors that you need to consider when you do such computations. Your age now and at the time of your retirement, the amount of money that you have saved and your total household income are just a few of the things that you need to disclose if you want to reassess the viability of your current savings and retirement plan. Other elements in the equation includes the percent of income to contribute, your expected salary increase in your household income, the expected rate of inflation, the rate of return before retirement, your years of retirement income, and civil status.

Experts agree that the point of any retirement plan is for you to live or enjoy one’s standard of living in retirement. So anything less of that means your retirement plan did not work that well. With this in mind, it is ideal therefore to save as much of your income as possible during your younger days, before you reach that retirement age. Incidentally, this is becoming the mantra of new age retirement: save more and rely less on a variety of traditional pension checks.

For the young ones, the "15% solution" is the one being pushed by financial experts and advisers. Being young means not to be tied down by specific goals regarding their retirement age. They still are feisty and wants to enjoy their life, which we can’t blame them. However, they still should start their savings accounts. Save as much as you can as early as you can. That’s a pretty good motto. Now the 15% solution refers to saving 15% of your gross salary. By doing so, you are replacing 50% or more of their salary in retirement. (the later you start, the more you’ll need to save).

But more often than not, you would need to find a second job after you retire just to increase the money coming in. But at this point, you can be as laid back as you want. Your second job after retirement is more of combination of work and leisure, with emphasis on the leisure part. This is the reason why people who have just retired took jobs that they considered their passion. Jobs that they really love to do. Such scenario is becoming more common. Retirees working part time seem to be the key to their own financial security.

 

Posted by Ardent Editor on Jun 12 2007 in Retirement 101

  • Sponsors