Easy Ways to Prepare for Retirement

Eventually, you will have to retire. When that time comes, will you be prepared? If your answer is no, try these simple steps to prepare yourself, and your bank account, for the inevitable.

1. Start saving by age 25: If you start saving for retirement at age 25, you only have to save about $4,830 annually to reach $1 million by age 65, compared to more than $15,000 per year if you start saving at age 40.
   
2. Know your retirement needs: Retirement is expensive, and experts estimate that you will need at least 70% of your pre-retirement income to maintain your standard of living after you retire.
3. Limit your spending: Examine your budget, and stick to it. Try to stay frugal, and it will pay dividends in the long run.
4. Take advantage of your 401k: If your employer offers a retirement savings plan, sign up, and contribute all you can.
5. Don’t touch your retirement savings: It may be difficult, but leaving your retirement savings in the bank will help you gain principal and interest that will impact your savings over time.
6. Find out about your Social Security benefits: On Average, Social Security benefits equal to about 40% of what you have earned before retirement. You can also use a retirement estimator tool to see what you could be expecting in benefits.
7. Ask questions: Talk to your employer, your bank, union, or financial adviser about anything you may be missing. Ask questions, and make sure you understand the answers. Your money may be on the line.