Many people these days are concerned about their future. That is why, careful planning is put into action as early as possible. However, it has become quite a challenge for lots of individuals to determine how much money should go into their retirement and life insurance. Many wonder if they are putting enough savings away for them to enjoy a comfortable retirement.
Figuring out how much you need to retire is very important. And there are some things which you should take into consideration when making your plans. First, you need to decide what kind of retirement lifestyle you want for yourself. Do you wish to live simply when you retire or do you want a more lavish lifestyle than what you are having at the moment? Answering this question is necessary so you’ll know just how much you need to put away.
You also need to determine the age you are planning to retire. Obviously, when you plan to retire young, you’ll live longer in retirement and this means you are required to save aggressively today. But when you opt to retire a little longer, this means that you’ll have more time to save and you will be spending shorter time in retirement years.
Essentially, there is no single solid rule that applies to all when it comes to how much they should save for their future. It all depends on the kind of lifestyle or age they want to retire. However, certain situations can’t be controlled. Getting sick or becoming unemployed before your target retirement age can happen unto you. So, it still makes sense to conceive some plan to prepare you for such eventualities.
One of the common suggestions that financial advisers will give is for you to sign up and make contributions to your employer-sponsored retirement plan or the 401(k). You can start contributing as low as 4% and make adjustments to a rate that you’ll feel comfortable later on. When your employer offers matching contribution, make sure to participate as this means free money for you. You may also consider investing in Roth IRA which is another wise investment vehicle for your future.
Another thing that you should start working on is setting aside a certain percentage of your paycheck towards your retirement each month. This means saving at least 10% of your gross income. The 10% is very ideal for people who are in their early twenties. When you commenced making your retirement savings when you’re past 30, you should try to catch up and increase the amount of percentage you are applying to as much as 15% to 20%.
When it comes to figuring out how much life insurance you need, you will have to consider the kind of lifestyle you wish to leave for your family in the event of your death. If you wish to provide future income for your spouse or kids, then a much higher Austin life insurance plan is what you need. But if you only wish for your life insurance to get rid of some debts when you are gone, then considering the much lower coverage will be deemed appropriate.
Everyone dreams of having infinite money. Just thinking about it can cause you to imagine boundless ways to spend it. If you got your gazillions now, you’d probably be living in a palatial home or jet setting your way all over the globe. While it’s rather farfetched to have a bank account that never runs out of money, it’s not impossible for you to become rich or become financially successful. You can have an easy life right now without worrying about money. The problem, however, is that many of your actions today are hampering your way to reaching your desired wealth. In order for you to achieve an astounding financial change in your life, here are five important money rules you should ponder and follow.
- Save before you spend. This is one smart money rule you should constantly apply in your life. Many people when they receive their salary are always itching on how they are going to spend their money right away. Avoid making such a rush to part with your hard-earned cash. Set aside first at least 10% of your salary and gradually increase this amount over time. Once you see your savings climbing, you will be more motivated to see it fatten up. Having savings is necessary because it means that you are free from any debt.
- Set up an emergency fund. Building an emergency fund is very important to help you weather the unexpected. Financial difficulties can come in the form of sudden unemployment, home repairs, auto repairs, medical bills and so on. Having an emergency fund to help you survive at least three months worth of your living expenses is considered standard practice. If you can accumulate enough money to help you survive six months or more, the better. Knowing that you are financially prepared for any hardship that may come your way will give you security and peace of mind.
- Leave below your means. This rule is very difficult for many of us to follow. People are often tempted to live in luxury, something that’s beyond their means. You want a rich life, but if you don’t have enough money left in your purse each month, how are you going to fulfill your other dreams? This rule is all about making the right choices, practical choices. You need a car to get you to work, but is it really necessary to drive a Mercedes or will a simple Hyundai will suffice? Leaving below your means doesn’t mean depriving yourself. You are still answering your needs. And while the luxurious car may make you happy, wouldn’t not worrying about money make you feel happier even more?
- Pay with cash and pay in full. Paying your purchases in cash helps to curb your spending. When you have a $100 bill in hand, it’s actually harder to part with it as opposed to simply swiping your card. Also if you are going to buy something, see to it that you already have the money to pay for it. For instance, if you plan to buy a brand-new appliance, save money for it first then purchase it by paying in full.
- Keep a money journal. Recording your spending will help you monitor and analyze where your money is going. Doing this can have a profound effect in your life since you’ll get to see how easily money can leak out of your hands. With a money journal, you’ll come into terms with the money you spend frivolously and on a whim. The journal will help you to make the necessary changes to your spending habits and plans.