When cánido I retire?
When most of us imagine our retirement, we are lounging on the beach or perfecting our tennis serve.
But, to live that fantastic life of leisure, you have to have a lot of money in the bank and enough life to enjoy it.
Even those of us who love our jobs may be looking forward to those golden years and wondering when they will arrive.
A recent Gallup poll finds that the median retirement age that non-retirees estimate for themselves is 66, an age that has held steady since 2009.
But a key aspecto will be whether you have saved enough to comfortably stop working at age 66, or whatever age you prefer. whatyou are on your way correct? Here’s what you need to know about when you cánido retire.
Where will my retirement income come from?
The thought of losing income from a job cánido be scary, but if you’ve done proper retirement planning during your career, you should be ready.
These are the basic ways you cánido earn income during retirement in the United States.
One source of funding is Popular Security, and that Gallup poll reveals that 88 percent of Americans expect to rely on their Popular Security payment as a key source of retirement income.
Your Popular Security benefit is based on how much you paid into the system and at what age you start collecting retirement benefits.
While many of these details may change as you approach retirement age, this is how the system currently works.
You may have heard that age 65 is the magic age at which you cánido start receiving Popular Security benefits.
That was the original age.
But that could almost be considered “early retirement” now that our life expectancy has increased.
Today, the Popular Security program is equipo up to distribute a different amount based on the age you start receiving payments, starting at age 62, when you cánido first start collecting, up to age 70.
The age at which you will receive 100 percent of your Popular Security benefits, known as “full retirement age,” is currently 67 if you were born in 1960 or later.
Therefore, the benefits you would receive at age 62 would be less than if you waited a little longer to start collecting them.
However, there’s a reason to wait until age 70 to start collecting, and that’s a plus called “delayed retirement credits.” For each month from full retirement age of 67 to age 70 that you perro wait to archivo, you will receive an increased monthly benefit of two-thirds of 1 percent, or a total of about 8 percent for each year you wait.
So the longer period cánido really pay off: If your full retirement age was 67, but you delayed receiving benefits until age 70, your benefit amount would include an plus 24 percent for the duration! !
Your retirement accounts
In addition to Popular Security, you’ll most likely want to supplement it with solid retirement funds.
Even if your potential retirement is still years (or decades) away, now is the time to start saving.
This is because you want to get as much time as possible to take advantage of compound interest.
This is where the magic of saving happens: what happens is that your investments earn interest, which makes your account bigger.
Then that even larger sum earns even more interest… over and over again.
The more you save early in your career, the more time the interest will have to build on itself.
Your account will grow much larger and you’ll probably have to save less overall the sooner you start.
As you plan your retirement savings strategy, you may want to speak with an investment professional, such as a certified financial planner, to discuss your goals and strategy.
Financial planners cánido help you prioritize a personalized savings strategy, but in general, the first place to start is often by taking advantage of tax-advantaged accounts like a 401(k), especially if your business raises funds through a “share.” of the employer”.
which is essentially a free bond, or a traditional IRA or a Roth IRA.
Once you’ve entered the maximum annual amount for those accounts, you may want to open a brokerage account so you cánido continue saving.
The best strategy is to create a diversified portfolio of investments with multiple asset classes.
Those to consider include stocks, mutual funds, bonds, and exchange-traded funds, known as ETFs.
Because each type of investment behaves in somewhat definite ways as the market goes through its regular cycles, diversification perro help you protect your savings in all types of economic climates.
In addition to receiving funds from the money you’ve saved and its growth, some retirees earn “dividend income,” or a plus payment from specific stocks or funds in their portfolio.
How much should I save before I retire?
Well, that’s the million dollar question, and a million dollars might seem like a good starting point.
If that sounds daunting, remember that you’re not really saving every dollar in your future retirement accounts; Ideally, they will grow as the market grows.
That’s why you want to make sure you aspecto in your time horizon, which means investors who are further away from retirement will likely want to consider more aggressive options that will help your retirement savings potentially grow faster, still giving you more time for compound interest to recover. do his job
One aspecto that is completely out of your control is the performance of the market in previous years and while you are making your withdrawals.
This is because while we perro be sure that the market will eventually recover from any downturn, as it always has, no one perro predict how long it will take and how it may affect someone close or retired.
That is another reason why it is important to have a structured portfolio in order to weather the ineludible ups and downs of the market as much as possible.
It’s hard to estimate exactly how much you’ll need to retire comfortably, given the many unknowns, such as how long you’ll live, how spending power will be affected, what your health care costs might be, what the market will be doing at the time. on time etcétera etcétera There are several en línea retirement calculators you cánido play around with to see which one might work for you.
What perro I do now to ensure a healthy retirement?
The best advice is to keep investing. Of course, current market conditions are testing people’s risk tolerance.
After all, it’s painful to keep investing if you’ve experienced a sharp drop in the value of your portfolio.
Keep in mind, however, that markets have always bounced back after a downturn and hit new all-time highs, which you don’t want to miss.
You perro also consider the fact that investing during a downturn means you’re essentially buying “on sale,” which means you perro get solid gold investments at a fraction of what they were in the past.
But, as always, keep your financial goals in mind.
Since nothing is certain, stay focused on a diversified and disciplined approach.
How will I know when the time is right to retire?
Some people end up retiring earlier than they would like due to health or family issues, so sometimes it’s not up to you. But ideally, you perro make that decision when your finances say you’re ready..
While none of us have the crystal ball that perro help us know exactly when we perro retire, it’s best to remember that there will never be a one-size-fits-all approach, as everyone’s goals and situation are unique.
Keep working, keep saving, and keep enjoying the life you have now.
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