Our parent’s generation assumed that Dad’s pension, plus Social Security was the key retirement solutions. Unfortunately, couples today cannot count on their employers or the government to provide nearly the amount needed in their Golden Years. Social Security funds are projected to become exhausted by the year 2042, so you’ll probably get zilch from the government.
Experts agree that unless you maximize your pension fund you will not be able to meet all your obligations.
How Much Can You Live On Each Year
The pivotal question is what amount can you withdraw from your savings, every year, without running out of money? For those who see future finances as a complex puzzle, by all means seek the opinion of a financial adviser. For all those do-it-yourselfers, start with these three simple questions;
- How much do I need to live on each month?
- During retirement, if I were to draw x amount from my retirement income, how long would it last?
- Do I need a long term care insurance policy?
The good news is you don’t have to play wait and see; you can build a bigger pension fund now.
Contribute the Maximum to a 401(k)
If you cannot contribute the maximum, you should contribute at least enough to get your company to match the amount. If you cannot contribute the maximum, you should contribute at least enough to get your company to match the amount.
Diversity Your Portfolio
Long-term retirement proceeds will mean a constant checkup for your portfolio; everyone is well aware of inflation, yet retirees tend to neglect a review of their investments.
A Blend of Insurance with Investments
Fixed annuities are a safe way to build a bigger pension fund because they diminish risk. Retirees seeking a fixed annuity should look for multi-year guaranteed investments because they’re low maintenance and they have pretty stable annual interest rates.
By the time you reach age 50, much of your major planning and key retirement solutions should be well behind you.