50% of Americans won't be able to afford their lifestyle once they retire. Finance planners suggest that you need around 80% of your current annual earnings to live comfortably in retirement, and with the number of seniors still working due to not being able to afford to work increasing, how can you ensure that once you are of retirement age, you don't need to keep working because you have to, but on the basis, you want to in your golden years?

 

Experts will tell you it's never too early to start preparing to retire. And far from wishing your life away, it allows you to build up that nest egg and give yourself a head start. Because if you start squirreling away some money in your 20s, you won’t notice the dent in your income as much as if you started in your 40s.

 

Regardless of your current age or when you start to build your retirement fund and make your plans, these tips will ensure you have the foundations in place for life after the rat race.

 

Retirement Advice

It can be a good idea to talk to someone about Wealth Management for Retirement Planning so you can get a handle on your goals, what options are available to you, and what you need to do moving forward. If you want to be able to relax in your retirement years, you need to put the work in now to reap the rewards in the future. So, getting expert advice can put you on the right track and ensure you do what you need to and know what to expect when the time comes to hang up your hat and wave goodbye to work.

 

401k

Your 401k is instrumental in ensuring you have the finances for retirement. If your employer offers a 401k plan, find out what you need to contribute to get the full employee benefit. You should transfer as much as possible automatically from your wages; this way, you don't miss any payments, and in time, you won't miss the deductions to ensure you're getting the full benefit from the plan.

 

Employee Pension

Much like with the 401k, you need to check with your employer if they offer any other pension contribution scheme and get this set up if they do. Find out what your benefit is worth, what happens to your funds if you change employers, and how you can access the money. If your employer offers this, there may be strict rules and conditions on your age when you retire to get the pension, what you need to do to access the benefits, and if your spouse is covered (and vice versa if applicable).

 

IRA

Regardless of whether your employer offers one or both of the above two options, setting up and contributing to an Individual Retirement Account can give you additional funds once you do choose to retire. You can put up to $6,000 annually into an IRA, even more if you are over 50. When you set this up, you will need to choose between a traditional IRA and a Roth IRA; the difference is that a Roth IRA is a tax contribution allowing you to save tax-free and withdraw a penalty and tax-free over 59 and a half, while a traditional IRA is tax-deferred. Tax will be payable upon withdrawals at the same age.

 

These 4 financial options are essential for good retirement planning. If you want to ensure you are in a good position once you enter later life and can support your current standard of living, then you need to make good financial decisions today.