You want to leave the workforce one day and spend time with family, or maybe just relax without the responsibility of a job.
Can you afford it?
A money plan to get to retirement—and through retirement—can help you feel confident your needs will be taken care of and help relieve any anxiety you may feel about your financial future. Let’s talk about your golden years.
What is retirement?
Retirement refers to the time in life when one leaves the workforce to spend more time pursuing leisure activities. In the United States, the average retirement age is around 64 for men and 62 for women.
Retirement and the term “financial independence” are often used interchangeably. You achieve both when you have enough savings, investment income, and pension income (if applicable) to cover your living expenses over your expected lifetime.
The word “retirement” also describes an unknown period in our lives. Most of us don’t know how long our retirement will last, which means it can be difficult to estimate how much money we’ll need.
Most American workers say they feel they’ll have enough savings for a comfortable retirement. That said, people are living longer these days, and healthcare costs also rise as you get older. In other words, your savings may need to last longer than they did in previous decades.
If you don’t know whether you’re saving enough, that’s ok. Let’s take a look on where to begin. What’s most important to understand is that you are your main financial priority, and that making progress depends on diligent planning.
You can get a better idea of how much you’ll need in retirement and how to get there by defining your unique goals.
What does retirement mean to you?
Every plan needs a vision.
To begin defining your vision, ask yourself the following:
1. When do you want to retire? What age do you want to stop working? You can start collecting Social Security retirement benefits as early as age 62, but delaying retirement can raise your monthly benefits.
2. Where do you want to retire? Moving plans and different standard costs of living can affect your expenses, which can change the age you’re comfortable retiring.
3. Who will retire with you? If you have a spouse or significant other, your retirement plans should take into account their retirement plans.
4. What will you do in retirement? Doyou plan to travel? Pursue a hobby? Spend more time with children and grandchildren? Those plans, too, can affect your planning decisions.
Save early, save often
It’s never too early to get started or too late to make progress on your financial plan.
The sooner you begin to save and invest for retirement, the better you’ll be able to take advantage of compounding—that is, the process in which an asset's earnings are reinvested to generate additional earnings over time.
Consider saving and investing 15% or more of your gross income each year, ideally starting in your 20s and 30s.
Take action to take control
A retirement plan can help you feel confident your needs will be taken care of and that you’ll reach financial independence on your terms.
That’s a powerful goal to strive towards, and a rewarding one to meet. By taking action now, you’ll take control of your finances far into the future.
We believe in you. You’ve got this.