One of the biggest mistakes young adults make leading up to their senior years is neglecting to set up a retirement account. Gone are the days of depending on Social Security benefits to provide enough income to meet day to day needs, if that ever really was the case. The need for funds necessary to cover living expenses, medical expenses, nursing home expenses, long term care, and anything else that comes up in terms of finances is an ever-growing reality.
This two part series talks about how to plan now, and save yourself the stress and the headache later.
- Create a savings plan with goals: if you have a savings account already, don’t dip into it for any reason. Keep adding to it, and develop a habit for saving. While they say you should have between eight and ten months worth of expenses put away into a savings account, establish this account first (incase something should happen and you are unable to work), and then create another savings account to help you meet your retirement planning financial goals. Don’t look at this as an option, make a priority just like paying your electric bill or making a mortgage payment.
- Understand your financial picture: in order for your financial planning to work, you must have a solid understanding with regards to what you are going to be spending on in your future. Set up an appointment with an asset protection attorney or an estate planning attorney to discuss your plan, and request information about the things you need to start planning for. They will help you devise a realistic plan, and ensure you do not leave anything out.
- Save through your employer: if you are not self-employed, inquire through your employer about a retirement savings plan. Many companies offer a 401(k) plan, which allows you to contribute directly from your paycheck during each payment period. If you are unsure if this is a good idea or not, put your mind at ease once again by speaking with your attorney.
- Does your employer offer a pension plan? Again, if you are not self-employed, you may be covered by your employer’s pension plan (if they have one). Inquire about this option, and see if this benefit is available to you. If so, request statements to keep with the rest of your financial records and other documents found within your estate plan.
For more tips, move on to part two of this series.