Most people retire somewhere between 60-70 years old, and most people live another 20-30 years after retirement. How can you prepare to have the income you need when you stop working?
A lot of preparing for retirement is straight up putting aside savings. A common number is putting 15% of income towards retirement (see Dave Ramsey Baby Step 4), but variations can be found depending on approach and personal circumstances.
The principles of investing are closely related to preparing for retirement. You don’t want your money just sitting around, you want it to work for you!
There are two main buckets for investment money – pre-tax and post-tax. As tax rates fluctuating up and down, and no one can predict the future, it’s best to have funds in both buckets. The following illustration shows how time may play a role in how much you invest in pre-tax and post-tax accounts. This is from the Self Reliance Personal Finance manual.
Often a work benefits package includes some type of savings towards retirement. The Human Resources department at your workplace can help show you your options.
Local financial advisors can help in planning how much you will need and further setting up a diversity of investments and accounts.
BOOK RECOMMENDATION: no matter what age you are – if you are just entering the workforce or preparing to leave it – this book is for you. Learn the importance of saving for retirement and the best way to do so depending on your age. Be prepared. Get inspired.
Be Prepared Seattle 