When you retire, it is important to start planning for your retirement age. Not only should you set a number of years where you want to retire, but you should also decide when that retirement age is. Planning ahead can help you achieve the lifestyle goals you have in place and it can also save you from living beyond your means.
Ideally you will want to retire at age fifty. If you are younger, then you may want to wait until a younger age and then start saving for retirement. Once you reach retirement age, the money that you have accumulated should be used to live on comfortably until you die or retire. That is how you will be able to retire without struggling to survive.
However, sometimes this is not how it happens. Let us look at what can happen if you are born at a time when you would definitely want to retire at a certain age. In the United States, males tend to retire later than females. This could be due to genes or it might just be the way men are. Either way, there are things you can do to delay your retirement age or to increase your chances of reaching your retirement age.
401k Retirement Strategy
One thing you can do is use your 401k as leverage. You should add more money into your 401k during your working years and then save it for retirement. By doing this, you will be able to live on a higher standard of living when you are not working. You will have more income available after retirement and this will reduce the amount of money you need to rely on depending on your retirement age. So, basically your savings will go towards taxes and other bills and leave some money in the 401k.
Another strategy to set your retirement age is to use the amount of money you make at your work as the investment for your future. Usually the best choices for investments are the stocks and bonds. Although, you can diversify your portfolio by using real estate, commodities, money market funds and so on. However, it is very important that you keep your risk level in mind while investing. If you are investing your whole life and you cannot afford to lose your shirt, then you should diversify your portfolio and get some other form of investment like bonds.
You should also start saving for your retirement age even before you start working. In fact, it is advisable to save a small amount of money each month for the retirement fund. Just don’t save more than what you can spare because that will only cause trouble when you retire. Therefore, you have to set a saving target and stick to it.
In The End
When it comes to the actual contribution made to the plan, don’t be lazy. Be a heavy spender. If you are already employed, then calculate your annual income and see how much money you can afford to contribute. If you don’t have a job, then calculate your total assets using the calculator available on the internet. Remember, you should never invest more than you can afford to lose.