Does Your 401k Need Help?
For most Americans who have not started planning for their retirement,401k plans seem like a "good bet". A serious problem with this idea is the investor's reliance on employer matching for the plan. This might cause an employee to rely too much on the employer and not contribute enough to savings. Nothing will give you a wake up call like using a retirement calculator. You can find them on the internet from a variety of places. Retirement planning is hard, and it isn't something you just throw together haphazardly.
Even if a professional financial planner is helping you, the financial planning process is hard. There are a lot of variables. The age you want to retire at, when you start saving money, how much you save, and the interest rate you earn are just some of the many considerations you have to think about. One of the biggest concerns may be your health when entering retirement and how long you live after you retire.
Perhaps the most difficult thing to plan for is inflation. Inflation is caused by Government printing currency. Because that changes from administration to administration, it's hard to predict what policy will be 20 or 30 years from now. On the internet there are dozens of retirement calculators available, and there is a lot of information and ideas on how to plan for this. Some of them seem more plausible than others. In as far as retirement calculators go, what most of them will show you is that you simply cannot rely on Social Security. Even if you do, you will still need to save a substantial amount of money just to maintain something resembling a pre-retirement standard of living.
If the economy is able to grow enough to outpace inflation, your investments must be able to keep up. Even still, with inflation running 3%-5%, your investments are losing value and struggling to keep up.
$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.
So, today's wage earners making $500 to $1,000 a week in income can expect similar changes when they reach retirement age. Today's calculations will show wage earners that they should expect to have a retirement nest egg of close to $1 million dollars to retire comfortably in 20 or 30 "Retirement Calculator" years.
One of the calculators tested showed shocking results: an adult starting with $100,000 adding $4,000 year to that would retire with nearly $900,000 but would end up broke by the time they were 85 years old!
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 if a professional financial planner is helping you, the financial planning process is hard. There are a lot of variables. The age you want to retire at, when you start saving money, how much you save, and the interest rate you earn are just some of the many considerations you have to think about. One of the biggest concerns may be your health when entering retirement and how long you live after you retire.
Perhaps the most difficult thing to plan for is inflation. Inflation is caused by Government printing currency. Because that changes from administration to administration, it's hard to predict what policy will be 20 or 30 years from now. On the internet there are dozens of retirement calculators available, and there is a lot of information and ideas on how to plan for this. Some of them seem more plausible than others. In as far as retirement calculators go, what most of them will show you is that you simply cannot rely on Social Security. Even if you do, you will still need to save a substantial amount of money just to maintain something resembling a pre-retirement standard of living.
If the economy is able to grow enough to outpace inflation, your investments must be able to keep up. Even still, with inflation running 3%-5%, your investments are losing value and struggling to keep up.
$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.
So, today's wage earners making $500 to $1,000 a week in income can expect similar changes when they reach retirement age. Today's calculations will show wage earners that they should expect to have a retirement nest egg of close to $1 million dollars to retire comfortably in 20 or 30 "Retirement Calculator" years.
One of the calculators tested showed shocking results: an adult starting with $100,000 adding $4,000 year to that would retire with nearly $900,000 but would end up broke by the time they were 85 years old!
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.
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More Info: Only so much information can be covered in one article. If you want more information about any aspect of personal financial planning, please visit David's website.
posted by Credit Counseling at
11:12 PM
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