The thought of retiring with enough Social Security benefits that will out-last us is no longer possible. Financial planners and even the Social Security Administration (SSA) tells us that we cannot depend on social security alone after retirement. The thought of saving money from other sources besides our 401k or pension plan sounds nice. You may even put it on the to-do list. However, it never gets done.
It’s never too late to start building your retirement nest egg without going to a financial planner. Instead, an account can help you. Retirement planning is just one accounting services Lakeland FL provides. An accountant will be just as helpful as a financial planner when it comes to retirement planning.
What is the Definition of Retirement Planning?
Retirement planning is the process of figuring out your income after you stop working. This typically means determining how much money you need to live, your definition of comfortable living and the actions you must take to reach your goals.
More specifically, retirement planning involves looking at the following:
- Sources of income after retirement
- Estimating expenses such as rent, food, and vacations
- Managing assets
- Implementing ways to save money now for your life later.
Retirements Goals Differ from Person to Person.
How much do you need to live comfortably after retirement? There is no magic amount you need. It is based on your personal needs. Some people believe they need $1 million to retire. Others can retire on less money.
The general rule is that you need at least 80 percent of income you make now to live off of after retirement. For example, if you made $100,000 each year, you would need at least $80,000. For 20 years, you’d have to save about 1.6 million. That sounds like an unachievable amount, but it is achievable. It all depends on the money saved and when you start saving.
What really trips people up when they save for retirement is how many years they expect to live. They often outlive their retirement. So, it is important to realistic about how long you may live. If you think you will 20 years after retirement, add more years on to it such as five or 10 years. This way you have a cushion if you live beyond what you’ve planned for retirement.
Working Towards Retirement with the Help of an Accountant.
Retirement planning is ideally supposed to begin and progress as you go throughout life’s stages. For instance, early in your working life, you were supposed to plan on setting aside enough money for retirement. During the middle stage of your life, you are supposed to set asset targets as you continue to save for retirement. During your retirement years, you receive all the money saved through life each money or year you live.
Life happens, and things don’t always happen that way. It is never too late to start planning for retirement. Check with an accountant about ways you can start saving money now for life after your career.