When should I retire? It’s a great question. And a good plan for retirement is one that starts early. At any point in your life, you can take steps to work toward financial security so you’ll have the freedom in retirement that you have today. By contacting a certified financial advisor, you’ll be taking a big step in the right direction. Together, you can develop a solid retirement savings strategy today to help you live comfortably tomorrow.
When should I start saving for retirement?
Now! As a rule of thumb, start saving early, since compound interest is king. Set aside $10,000 for your nest egg when you are 25 years old, the growth potential is 40 years long, assuming an average age of retirement is 65. On the flip side, a 60-year old setting aside $10,000 only has 5 years to see growth potential.
I want to retire. Now.
A retirement calculator can help give you an idea of how much you’ll need to retire comfortably. But an investment professional offers a more prudent way of tailoring your investment portfolio to your specific goals. Our investment services include:
- 401(k), SEP and Retirement Plans
- Tax-Exempt Investments
- Mutual Funds
- Individual Retirement Accounts (IRAs)
- Money Market Accounts
- Longer-Term CDs
Factors that impact your retirement savings needs
Keep in mind cost of living expenses change at different points in life and in different locations. If you’re moving to a lower cost of living area your money will go further…or your retirement can come earlier. While some sources of income go away, others become available including Social Security, pensions and paid-for-health care or Medicare.
So how much do I need to retire?
Retirement planners generally recommend that you’ll need 70% to 85% of preretirement income to continue the lifestyle you’re accustomed to. Of course, you'll no longer be saving for retirement, paying for junior (hopefully) or covering work-related expenses such as commutes. To achieve the magic number, an 85% replacement ratio, financial experts recommend you save eight times your final salary, minus Social Security and any pensions.
Early is better. But it’s never too late.
Even making small changes in your savings habits now can have a huge impact long term. Regardless of your age, it’s never too late when it comes to saving for retirement. Get started today!