Despite numerous horror stories circulating around the internet about the importance of saving for retirement, few Americans take their savings account seriously. Experts say that no matter what your age is, you should start saving now.
Here are 7 ways to make the best out of your retirement plan
Retire at age 65 or more
Perhaps due to the entrepreneurial bug which bit them to perpetuate a burning desire to start their own business, most Americans are retiring early. This means they’re feeding more into their savings plan and eventually end up depending entirely on their Social Security to help with the program.
Don’t blindly walk in the footsteps of your parents
The circumstances which faced your parents are strikingly different than the ones you’re facing now. So while they had access to over-the-top generous pensions and could get away with investing in just a single house for the rest of their lives, you don’t have that luxury. The real estate dynamics of today have become somewhat of a slippery slope at best. Prices which skyrocket one day can helplessly plummet below your expectations the next.
Save a larger chunk of your income
This is more important for the younger generation which lives only in the present and lack the foresight to invest in a better tomorrow. The low interest rates on their savings accounts fail to attract their attention spans (which are volatile as it is).
Seek an employer who offers a monthly pension pan
Surprisingly, the number of employers who offered a monthly pension plan fell from over two third in the 1970 to less than a quarter in 2017. That pension will become an additional source of income on top of your Social Security payment for this year and the retirements account. So if you’re hunting for a job, check if the employer has a monthly pension plan for when you retire.
Calculate other factors into account
There are numerous factors you’ll have to take into account such as the mortgage or rent payments, living expenses and more importantly your health care costs, this is especially important if the current US administration decides to repeal the Affordable Care Act. From prescription drug plans to nursing home expenses, the costs begin to unravel if you fail to calculate the factors. A hefty blow can be dealt to your well laid plans if your spouse dies earlier than you anticipated or contracts a debilitating illness not covered in your health plan.
Invest in your self
You can’t afford to be 60 or 70 and have no marketable skills to achieve gainful employment. Consider learning a new skill such as programming or managing hedge funds. Learn to take advantage of the disruption brought about by the internet, perhaps launch your own online business and market it unabashedly.
Become financially literate
You don’t need to have a PhD in Mathematics or Finance to know what the term annuities mean or what a 401(k). You owe it to yourself to learn about basic financial terms to make well informed decisions and avoid the potential pitfalls which can threaten a successful retirement plan.
