How To Get Ready For Retirement
If you want to get ready for your retirement, the question you need to ask yourself is whether you will be financially ready to retire when you are mentally and emotionally ready? It takes money to be able to retire, not just desire.
Prior generations retired based on age, future generations will be retiring based on their financial situations. In the past once you hit age 65, you retired regardless of how much money you may have put aside, because social security was a strong source of income. In the future, that will not be the case.
You will need to be able to generate your own stream of income to replace the money from your pay check before you can retire. Financial experts say that you will need at least 85% of your pre-retirement income at retirement. Unless you plan to continue working during retirement, where will your retirement money come from?
Sources Of Retirement Money
You have 3 sources of retirement income. You may get some money from social security, but you are better off focusing your efforts on your personal retirement investments.
1) Social Security.
Social security will be a weak source of retirement income. You should build up your other sources of retirement income and not rely too heavily on social security; it may not be available in the future.
2) Retirement Investments.
Your most reliable source of retirement income will be your 401k account or Individual Retirement Account. These investment accounts are the most reliable because you control them. You control the contributions and the investment choices. You need to stay diligent on making your 401k contribution limits
3) Your Other Investments
You can supplement your retirement stream of income with annuities, savings accounts, real estate and life insurance accounts.
How To Save Enough To Retire
So now that you know the sources of retirement income, how do you generate enough money to replace your paychecks? Keep in mind that we are living longer than previous generations so we will need more retirement income.
Pay Now Or Pay Later
You have a choice, either spend your money now or save it for later. You only make so much money so how you spend that money will determine if you have to keep working or not.
Do you really need a cafe latte every morning? Do you have to eat lunch out every day or can you bag your lunch a few times a week? If you stop smoking you not only save money but you also will improve your health.
If you saved the money from those luxury items you will be surprised on how it all adds up. If you don’t believe it, try it for a month.