There are some people that do not even think about retirement and how they are going to live on their retirement benefits until they are in their forties because when they are in their twenties and thirties retirement seems so far away. By the time they reach their forties they start to realize that in twenty-five years or so they are going to be ready to retire and enjoy life and the thought hits them as to how are they going to live on their retirement benefits. Now comes crunch time and they start to scramble and try to find ways to start saving. Here are some suggestions as to how you can start saving for your retirement when you are in your forties.
- The first thing is that you need to decide what kind of savings you are going to use. Is it going to be a savings account, a mutual fund, or an IRA? Whichever way you are going to save make sure that you stick to your goals and start saving, even it you have to start out small and then add more to what you are saving over time.
- You also need to know your what your retirement needs are going to be because it can be expensive. It is estimated that in order to retire you are going to need about seventy to eighty percent of what your pre-retirement income is to be able to be able to maintain the standard of living that you are now use to.
- Check to see if your employer has a savings plan for retirement and contribute to that. This would most likely be a 401K plan and it is possible that the company will either match or put in another percent above what you are putting in yourself. Since the contribution is taken out of your paycheck before taxes are taken out, your take out taxes will be less.
- Find out if your employer has a pension plan and then make sure you are covered by the plan. Make sure that you find out what your benefit would be once you retire. You also need to see what would happen to your pension benefit if you change jobs or you lose your job to downsizing.
- Once you start saving for retirement make sure that you do not touch your retirement savings. If you do you will not only loose interest and principal, but you may also have to pay penalties for early withdrawal and loose tax benefits. If you do change jobs you can either leave your savings in your current plan, put them in your new employer’s plan, or change them over to an IRA.
These are just a few ways that you can start to save for your retirement and make sure that you will be able to maintain the type of lifestyle that you are accustomed to. You should also find about what your Social Security benefits will be at the age of retirement because that information will help you know just how much extra you will need to have a month to maintain your current lifestyle.