It is never too early to start thinking about your retirement. In fact, too many people put this important topic off until it is too late and they realize that they did not save enough to retire. Then they will need to keep up part-time jobs just so that they can survive. Retirement should be about resting because you spent so much of your time and energy working that you deserve this time off. It is so important that you start planning right away for retirement so that you can truly enjoy this momentous occasion.
Once upon a time, people were able to not worry too much about saving for their retirement because whatever they needed to cover them came from Social Security. For those who have been staying current with the news, you know that Social Security is not something that you should be relying on when you retire especially if you have several years still to go because it may not be able to help you. One of the big reasons for this is because before when people retired at 65, they would only need the extra money for up to 12 years after retirement. As people live longer, the more money comes from Social Security and draining it for the future generations until it ultimately cannot keep up. Now that you know this, you fully understand just how important it is to save up for retirement.
So how much do you need to retire?
Everyone has a different number that depends on their lifestyle that they are hoping to maintain. This means that you need to calculate how much money that it takes to maintain your current lifestyle.
Take a close look at how much you actually spend and not how much you currently earn. So say that you earn around $70,000 a year but only spend around $40,000 a year, the $40,000 a year is the number that you are looking at. Take this number and multiply it by 20, as people live on average around 85, which is 20 years after the retirement age of 65. Some tell you to multiply this number by 10 or 15 percent but by going up to 20 you are giving yourself a higher number than you may need for a cushion in case of emergency. You may be surprised at this number, thinking that it should have been much higher or lower than you had expected. Either way, it will be an eye-opening experience.
Once you learn all about how much you need to start saving for your retirement, you can start looking at all of the ways that you can start saving. For instance if your company offers a 401K, this is something that you really need to start looking into. Find the most efficient way to save your money to get the highest returns and you are going to be well on your way to being able to enjoy your retirement.