When we talk about retirement, most of us are still thinking about our parents’ retirement and how they did – or did not – plan properly for it. It’s no big stretch to think that our retirement will differ significantly from that of our parents, but there are still lessons to be learned from them in preparing:
1. Seek out a pension plan. If you are considering a career change or job move, look for companies that offer traditional pension plans. Having a pension can make an incredible difference in retirement security.
2. If you don’t have a pension plan, compensate. Start investing now in a 401(k), an IRA or other defined contribution plan early and keep investing in it throughout your working life. Figure out what you could have made if you had a pension plan, and contribute that amount to your own plan.
3. Save for a long life. None of us lives forever, but that doesn’t mean you shouldn’t save as if you would live forever. Running out of money in your 80s or 90s should you live that long is a frightening prospect; medical advances are extending life spans and you need to save for a long life.
4. Plan for health care expenses. It is estimated that most Americans will spend at least $240,000 on health care in retirement, and you will either need to save that amount or have a health coverage plan in place to cover your retirement medical costs.
5. Start early and stay the course. As soon as you start working, aim to save at least 10 percent of your income every year – 15 percent is even better if doable. And keep saving throughout your working years. As your salary increases, try to set aside even more so the comfortable retirement you envision can become a reality.
If you’d like to learn more about retirement planning strategies for your family, call our office today to schedule a time for us to sit down and talk about a Family Wealth Planning Session.