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Retirement Planning -- Plan Now! |
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Will you be able to live comfortably on your retirement income? Less than half of all American workers have begun to save for retirement and they can expect to live 18 years in retirement. While it is never too soon or too late to save for retirement, many people put it off until about ten years before they expect to retire. At that time they are usually at their peak earning potential and may able to reduce or eliminate mortgage and credit card debt. People who do not save for retirement during their employment years may face disappointment in the quality of life during their retirement years. Three common sources of retirement income include:
As a general rule, people need 60 to 80 percent of their preretirement income to maintain their present standard of living. Social security benefits may provide about 20 to 33 percent of retirement income and company pension plans may provide another 20 percent. Because income from social security and employer-sponsored plans may not meet retirement income needs, it is important for workers to supplement their social security and pension income with personal savings and investments. Most people have high expectations for their retirement and are confident they will have saved enough money for it. However, many of them have not yet begun to do so and will wait until it's too late. Financial counselors find a growing number of older Americans, in or nearing retirement, mired in debt and seeking debt counseling with little or no money set aside for retirement. You should begin financial planning for retirement well ahead of the last day you work. In fact, the earlier you begin to plan, the more choices you have and the greater are your chances for a successful retirement. Retirement planning is much like planning a trip. Any plan begins with establishing your destination, or goal, and a timetable for taking each step toward that goal. This website shares with you several steps you should take to planning a successful financial transition into retirement, including: estimating retirement expenses, estimating retirement income, and balancing retirement income with expenses. Retirement is expensive. Experts estimate that you'll need about 70% of your pre-retirement income - lower earners, 90% or more - to maintain your standard of living when you stop working. Understand your financial future. |
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