| We have heard an awful lot lately about the need to plan for retirement and learn to live within our financial means. More and more people are learning the hard way that they are not prepared for any type of rainy day. But, what is the average percentage of Americans that have retirement income and how much should that be?
The exact percentage of Americans that have retirement may be hard to find but in this article I'm going to provide you with some very basic guidelines of how you should start saving for your retirement.
At the end of the day, the amount of money you need for retirement will depend entirely on the type of lifestyle you lead.
Most people want to maintain the lifestyle they have had during their working years into their retirement years.
No one wants to go from an affluent six figure a year lifestyle to having to live in a lousy apartment and eat macaroni and cheese all the time just to get by.
That is why starting your retirement planning as early as possible is very important. But, even if you are in your 40's or 50's, you can still save for retirement.
Here are some things to keep in mind:
1. The first step, and the most important one if you are little older and just beginning to save for retirement, is to set a realistic budget right now.
Most of us, no matter what our income level, tend to waste money. That "waste" may be in the form of eating out too often, buying too many clothes or using our credit cards excessively for things we don't really need.
What ever your "waste" is, you need to cut it out or at least cut it way down.
2. Once you've gotten to a reasonable budget and cut out most, or all, of your waste you need to take that "found" money and invest it.
Now this is the place where many people will mess up. They will do what they think they should do, what the "experts" tell them to do.
They will hire a financial planner and turn over control of their money. That is a mistake. Everyone should have at least a basic foundation of financial education.
Without it, how can you know that the information your expert is giving you really makes sense for you?
Who will take more care of your precious assets; you or someone you hired? Take the time to gain a little basic knowledge and become a partner in the care of your money.
3. Investing for the long term is a good strategy, but only if the stocks you have purchased are in a sound businesses.
Too many people, financial advisers too, follow the herd and invest in what is "hot" right now.
That isn't usually the best way to go. You need to invest for the long term in a company that can weather the ups and downs of any economy.
To do that you and your planner will need to be willing to spend some time finding these types of companies.
And, equally important, if it becomes apparent that you have made a mistake, get out.
So many people lost a big chunk of their retirement portfolios because they were advised to "ride it out" and leave their money in the market when things started getting ugly. Dumb.
You can become one of the percentage of Americans that have retirement income sufficient to sustain you in your golden years... if you start now. |