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We all want a financially secure retirement plan, and that starts with making a plan now. As you start aging, you may not want to work forever or be able to rely entirely on social security. Therefore, thinking ahead is the key to securing your future, which is only possible with a retirement plan.
So, if you’re ready to explore retirement options and not sure how to start making a financial plan, don’t worry. Here is a detailed guide on retirement planning that you can consider in this blog for your help:
Know When To Start Retirement Planning
If you’re wondering when you should start a retirement plan, it’s all depending on you. However, the earlier you start planning, the more money you have to grow.
That being said, it’s never too late to start retirement planning. So, don’t feel like you have missed the boat if you haven’t started yet. Even if you haven’t so much to be considered for retirement, remember, every dollar saved now will be much appreciated later.
Therefore, strategically investing in a retirement plan will help you to make the most out of it.
Figure Out How Much Money You Need To Retire
When exploring the retirement planning guide available on SoFi’s official website, the key step you must consider is defining your money and expenses. You need also to figure out how these expenses may change in retirement.
For example, consider what in your life you would still like to keep. For example, this could be vacations, dinners out, or other costs such as car and home maintenance costs.
Usually, the typical advice is to replace 70% to 90% of your annual pre-retirement income through savings and social security. With this strategy, you can expect a handsome amount per year in retirement.
Prioritize Your Financial Goals
For many people, retirement is probably not the main saving goal. Lots of people have financial goals they feel are more pressing, such as paying down a credit card or student loan debt or building up an emergency fund.
In such cases, a good rule of thumb is to save for retirement while you’re building your emergency fund. This is even better if you have an employer retirement plan that matches any portion of your contributions.
Choose the Best Retirement Plan for You
When considering retirement planning, one of the crucial steps is choosing the right plan. It is never about how much to save but also where to save it.
Remember, there is no single retirement plan that is the best. But there is a combination of retirement accounts for you, which you must consider. In general, the best plan provides tax advantages and additional savings incentives, such as matching contributions.
This is one of the main reasons why a 401(k) with an employer match is the best place for many people to start.
Select Your Retirement Investment
Lastly, when you’re considering a retirement plan, it is crucial for you to learn the right mix of retirement investments depending on how long you have the need for money.
As the retirement plan provides access to a range of investments, including stocks, bonds, and mutual funds, exploring the right option is essential.