Retirement preparation has always been a big deal, but in the unsure economic times that we live in today, retirement preparation and planning is even more of a concern. After millions lost much of their retirement money in the 2008 collapse, retirement planning became something that jumped to the top of everyone’s list, including people who were still young. So what is the best way to prepare for retirement?
Retirement planning and preparation can mean different things to you, depending on how old you are and where you stand right now as far as work goes. That being said, there are three main areas you will want to consider when you are in the midst of preparing for retirement. Those three things include:
- Savings and Investments
- Social Security Benefits
Pensions: Pensions are very important for individuals who have worked for the same company for a long period of time, as the longer you work the more money you will receive after you retire. A pension is defined as “a sum of money that will be paid regularly to you after you retire,” so focusing on this aspect and building a solid portfolio around your pension will get you off on the right track toward a proper retirement.
Savings and Investments: Simply put, savings and investments are the “amount of money you have properly saved and/or invested over the years leading up to retirement.” Many had to empty their life savings after 2008 to cover what they lost; but this is still a great way to prepare for retirement. Savings accounts, certificates of deposit, 401Ks, precious metals investments, and any other investments or saving that you have built up over the years will be relevant for retirement, so make sure you do your best to invest wisely.
Social Security Benefits: Most will probably be familiar with Social Security and how it works, but just in case you are unsure… Social Security is the “comprehensive federal program of benefits providing workers and their dependents with retirement income, disability income, and other payments.” The Social security tax that is taken out of your paycheck is used to pay for the program.
There are always stories floating around and fears coming from people regarding losing this benefit. While things like this are always a possibility, the fact of the matter is that Social Security benefits remain a crucial part of this country’s retirement outlook. Many live on only their Social Security checks alone. However, if combined with a nice pension and proper savings and investments, you Social Security benefits can only add a positive to the overall look of your retirement planning.
Once you have a better understanding of the retirement aspects listed above you can start to plan properly. Retirement planning and retirement age are both much different than they once were. Many of us will not be able to retire when we want simply because the overall economical outlook will force us to work a bit longer. In order to get a better understanding of what you may need to save and invest, check out this very helpful Social Security retirement calculator and use it to run some numbers for yourself.
Final Thoughts on Retirement Planning
Retirement simply isn’t as simple as it once was (and even then it wasn’t simple). That is not a statement to discourage you; it is simply a statement that you should use to drive you and encourage you. Work hard now, plan for retirement properly, and in the long run you will set yourself up for a nice retirement.
*Make sure you consult a professional when it comes to investing and what you may want to invest in.