Why Your Employer 401k Might Not Be Enough
Most Americans rely on 401ks for the bulk of their retirement. A serious problem with 401K plans is the investor's reliance on employer matching for the plan. This may cause an employee to rely too much on the employer and not contribute enough to savings. But, if you have not taken a serious look at retirement planning yet, nothing will give you a wake up call like using one of the many retirement calculators available on the internet. Retirement planning, which is essential for every adult, certainly is a difficult task and shouldn't be taken lightly.
Even when you use a professional adviser, the financial planning process can be difficult. There are just so many variable to consider: the age at which you retire, the age at which you start saving money, and the amount you save for retirement are just a few considerations.
You also need a way to account for fiscal irresponsibility on the part of Government (i.e. inflation) and what that will do to your retirement savings. On the internet there are dozens of retirement calculators available, sponsored by retirement organizations, investment companies and other businesses in the money management business that can help you do this. What most of the calculators will show you, is that for most people, even relying on Social Security, you will need a lot of retirement savings to maintain a near pre - retirement standard of living.
The economy will probably recover, and continue to grow. However with inflation at anywhere between three and five percent, you are going to be gaining and losing value in your investments based on how much your savings is being eroded.
$50 a week used to be a "normal" wage. Even during mid-life that respectable income had increased to $200 a week. Now, however, you would not even think of trying to live off of $200 a week, let along $50/week.
If you make $500 or $1,000 a week, you can expect a similar phenomenon when you retire. A retirement calculator will show that you should have a retirement nest egg near $1 million dollars to retire comfortably in 20 or 30 years.
An online calculator calculated that an adult starting with $100,000 and adding $4,000 year to that would retire with almost $900,000 but end up broke by age 85.
An essential part of managing your existing income is setting aside and investing funds for your retirement. Despite the difficulty of estimating your retirement income and expenditures, there is a wealth of assistance available on the internet to get you started, and professional advisors ready to help when needed.
Even when you use a professional adviser, the financial planning process can be difficult. There are just so many variable to consider: the age at which you retire, the age at which you start saving money, and the amount you save for retirement are just a few considerations.
You also need a way to account for fiscal irresponsibility on the part of Government (i.e. inflation) and what that will do to your retirement savings. On the internet there are dozens of retirement calculators available, sponsored by retirement organizations, investment companies and other businesses in the money management business that can help you do this. What most of the calculators will show you, is that for most people, even relying on Social Security, you will need a lot of retirement savings to maintain a near pre - retirement standard of living.
The economy will probably recover, and continue to grow. However with inflation at anywhere between three and five percent, you are going to be gaining and losing value in your investments based on how much your savings is being eroded.
$50 a week used to be a "normal" wage. Even during mid-life that respectable income had increased to $200 a week. Now, however, you would not even think of trying to live off of $200 a week, let along $50/week.
If you make $500 or $1,000 a week, you can expect a similar phenomenon when you retire. A retirement calculator will show that you should have a retirement nest egg near $1 million dollars to retire comfortably in 20 or 30 years.
An online calculator calculated that an adult starting with $100,000 and adding $4,000 year to that would retire with almost $900,000 but end up broke by age 85.
An essential part of managing your existing income is setting aside and investing funds for your retirement. Despite the difficulty of estimating your retirement income and expenditures, there is a wealth of assistance available on the internet to get you started, and professional advisors ready to help when needed.
About the Author:
Author: Only so much information can be covered in one article. If you would like more detailed information about any aspect of personal financial planning, please visit David's website.
posted by Credit Counseling at
5:11 PM
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