Financial experts recommend that individuals begin saving for retirement as early as possible in their work life.
However, many people fail to consider the money they will need during retirement until they are well into their 40s or 50s.
The benefits of starting to save for retirement early can be significant. Here are four tips you should keep in mind as you do your retirement planning:
1. Continue growing your retirement savings
Make saving for retirement a regular part of your financial mindset. Set up an individual retirement account and contribute to it on a regular basis.
Many funds can set up automatic contributions that will make this task easy for you. Also, check into your employer's program for retirement savings.
Many companies will match funds that you put into their retirement plan. Fund your account to the maximum amount to take advantage of this benefit.
2. Consider ways to receive passive income
Some people choose to save additional amounts of money to invest in property that will provide income for them in their later years. Rental property can be a good way to provide "passive income" that is perfect for supplementing your money during retirement. However, you should carefully investigate properties before purchasing to ensure that they will continue to provide the long-term income for your needs.
3. Learn about Social Security benefits
Social Security benefits will be an important part of most individuals' retirement planning, but many people don't begin to research how the system works until they are close to retirement age.
The benefits you receive at full retirement age will only be about 40 percent of your usual income, so you will have to make up the difference in some other way if you hope to maintain your current standard of living.
The Social Security Administration website has a wealth of information and answers many of the most common questions about this critical federal program. Read the information carefully, so that you understand the restrictions and reductions in benefits that occur at different ages.
4. Talk to a professional Financial Advisor
Certified financial planners understand the complex laws that apply to estate planning and other matters that should be a part of your retirement plan for the future.
An advisor can help you compose a will, a trust fund or other legal structure to ensure your money is well protected, regardless of what happens in the future.
The advisor can also make recommendations on the types of financial vehicles that will help to maximize your investments. Advisors may also provide legal advice, so that you can have a defense attorney on hand to help protect your assets.
Careful planning can help you to reach your retirement goals and ensure that your money is safe and ready for you when you need it.
You don't have to have a big income to begin a savings program that will help you to enjoy a comfortable retirement. Every action you take to accumulate wealth will provide new opportunities to grow your money faster.
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