Your Estate Planning Checklist
Use this estate planning checklist to secure your assets for your loved ones.
How much retirement income do you really need for your future plans?
Retirement is the time to travel, spend time with loved ones, and relax! Unfortunately, only 14 percent of Americans say they are confident they’ll have enough to live on when they retire. Thankfully, it’s never too late to increase your savings so you can enjoy retirement. After all, having the financial freedom to live exactly as you’d like will bring a sense of empowerment in this new chapter of life. To amplify your savings plan and nail down your retirement income, continue reading.
While there’s no specific number to achieve for your retirement income, a generally-accepted rule of thumb is to collect 80 percent of the yearly salary you made while working. From there, multiply that number by your estimated life expectancy to determine an approximation of the minimum amount of money you’ll need. If you’re planning on buying a vacation home, taking annual family trips, or picking up a new hobby, you’ll want to factor those costs into your yearly expenses, too. While this may sound like a great deal of money, there are steps to ensure you have enough retirement income to live comfortably.
Sticking to a budget is the best way to take control of your spending and is even easier to manage now that countless apps offer budgeting tools. Overtime, remember to revisit your original budget to continue balancing your income and expenses. Investments, including your savings account, should be included in your monthly budget. If you find yourself with extra funds due to a raise or bonus, treat yourself to a modest gift if you’d like, and save the rest to meet your retirement income goals.
When an employer matches your 401(k) contributions, they contribute to your retirement savings based upon the amount of your annual contribution. If your employer offers this perk, be sure to contribute enough money to take full advantage as it can quickly grow to a substantial asset over time. Specific terms of 401(k) plans vary from employer to employer, so be sure you’re familiar with the details of yours to ensure you’re using it to its fullest.
If you weren’t able to save as much as you would’ve liked when you were younger, there’s no need to fret. Catch-up contributions allow individuals over the age of 50-years-old to contribute more than the standard amount to their retirement accounts. In 2019, the IRA catch-up limit was $1,000 more than the basic contribution limit, while the catch-up rate for 401(k) participants was $6,000. If you’re of-age, consider increasing the contributions to your accounts so you can alleviate stress during retirement down the road.
Regardless of your plans for retirement, there are countless ways to consolidate your debt. One significant way to accomplish this is by eliminating your house payment. Whether you plan to stay in your current home through retirement, purchase a vacation home for the colder months, or downsize, paying off your mortgage can save you a considerable amount of money.
Additionally, remember that consolidating your debt also includes any credit card debt and outstanding medical expenses. Remember, the quicker you can pay your bills off, the more comfortable you’ll be post-retirement. To help you manage your debt, consider meeting with a financial planner to arrange the best course of action for your situation.
For more information on retirement planning, contact the advisors at Royal Oak Financial Group. We will review your retirement accounts and make sure your plans for the future are working to help you reach your financial goals.