Young Americans in their twenties have spent many years and often countless dollars training for their chosen career path. While planning now for retirement in the distant future seems unneeded if not unnecessary for many young workers who are just starting careers and families. At the same time beginning to plan now for their future will allow these individuals to prosper in the long run.
Most young people mistakenly assume Social Security will support their retirement, but public funds are not guaranteed. Young Americans must take responsibility for their future. For most workers, it is recommended by financial advisers to save approximately 75% of their pre-retirement income to maintain their current quality of life. But the annual standard of living increases and soaring medical costs often require saving up to 95% of annual pre-retirement income to live comfortably. Young people need a savings plan.
Starting to save early in life allows young people's money to increase in value over time and puts interest to work for them. Comparing retirement funds of two retirees shows that the retiree who started regularly saving small amounts in his twenties yielded nearly triple the amount of the retiree who waited until his forties to begin saving larger amounts. Waiting to save increases the possibility that retirement will be postponed as the worker rushes to catch up on retirement fund contributions.
Putting funds away for retirement doesn't need to be a chore. Most companies provide retirement savings plans for their employees, including 401(k) plans. The worker contributes a set portion of their paycheck into the retirement account, and possible will also receive a matching contribution from their employer as an added bonus. These payroll deductions to ones 401(k) plans are withdrawn pre-tax and grow tax free until funds are withdrawn at retirement. This retirement investment tactic is a hassle free way of putting away funds for retirement.
Other ways to save for retirement are certificates of deposit, IRA, investments in real estate and money market accounts. Consult with a financial adviser, CPA, or a bank officer to get advice regarding selecting a planning and saving approach that best meets ones retirement needs and investment objectives. Young people who start saving wisely can enjoy their retirement comfortably and happily if they take a few simple steps.
Most young people mistakenly assume Social Security will support their retirement, but public funds are not guaranteed. Young Americans must take responsibility for their future. For most workers, it is recommended by financial advisers to save approximately 75% of their pre-retirement income to maintain their current quality of life. But the annual standard of living increases and soaring medical costs often require saving up to 95% of annual pre-retirement income to live comfortably. Young people need a savings plan.
Starting to save early in life allows young people's money to increase in value over time and puts interest to work for them. Comparing retirement funds of two retirees shows that the retiree who started regularly saving small amounts in his twenties yielded nearly triple the amount of the retiree who waited until his forties to begin saving larger amounts. Waiting to save increases the possibility that retirement will be postponed as the worker rushes to catch up on retirement fund contributions.
Putting funds away for retirement doesn't need to be a chore. Most companies provide retirement savings plans for their employees, including 401(k) plans. The worker contributes a set portion of their paycheck into the retirement account, and possible will also receive a matching contribution from their employer as an added bonus. These payroll deductions to ones 401(k) plans are withdrawn pre-tax and grow tax free until funds are withdrawn at retirement. This retirement investment tactic is a hassle free way of putting away funds for retirement.
Other ways to save for retirement are certificates of deposit, IRA, investments in real estate and money market accounts. Consult with a financial adviser, CPA, or a bank officer to get advice regarding selecting a planning and saving approach that best meets ones retirement needs and investment objectives. Young people who start saving wisely can enjoy their retirement comfortably and happily if they take a few simple steps.
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If you would like to read more regarding saving for retirement, visit Christopher Stanley's blog on 401k contribution limitswhere he discusses retirement guidelines including his predictions regarding the 2012 401k limits.
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