Five things you can do today to start planning for retirement

The best time to start planning for retirement is now, no matter what your age. Considerations will be different based on how close to retirement you are, but the earlier you start planning, the better.

Here are five things you can do today to start planning for your retirement

1. Calculate how much you’ll need to save.

The general rule of thumb is that you’ll want to save 70% to 90% of your pre-retirement annual income. So, if you make $100,000 per year, you should aim to have saved about $70,000 to $90,000 times the number of years you will be retired.  There are numerous online calculators that can help you get an even better estimate based on your estimated spending, other expected income, the age you want to retire, life expectancy, and rate of return on investments.

2. Make contributions to a retirement account.

These can be part of an employer 401(k) or similar plan or a personal account like an IRA. If part of an employer plan, you may be eligible for matching contributions, so always make sure you’re contributing at least that much to make sure you’re not missing out on free money. These deductions can be made pre-tax so that it reduces your taxable income, resulting in tax savings as well. If you don’t have an employer plan or are looking for other options, you can open an IRA with an online broker or account provider. There are many different types, including Roth IRA, traditional IRA, self-directed, Simple, and SEP. Each offer their own benefits, so you’ll want to research thoroughly or seek the advice of a financial advisor.

3. Select the appropriate investments for your retirement plans.

Generally, you can tolerate the risk and be more aggressive with your investments the younger you are. As you get closer to retirement age, you should shift to more conservative investments. Many plans offer plans targeted portfolios that provide an ideal mix of accounts based on when you plan on retiring.

4. Save for healthcare expenses

You can also open a health savings account. Many employers offer contributions to these accounts. Not to be confused with a healthcare flexible savings account, HSAs can be rolled over from year to year. This makes it a great way to put aside for medical expenses after retirement. Like 401(k) contributions, HSA contributions are also tax-deductible, reducing your tax burden while you’re working.

5. Consider Social Security.

Keep in mind that social security benefits will likely not be enough and there are several factors that can impact your monthly benefit amount, such as when you start receiving your benefits. You can begin collecting your benefits as early as age 62, but that greatly reduces your benefit amount. You should also set up your account at ssa.gov to review your earnings and correct any errors, as they may negatively affect your benefits down the line.

There are many different considerations when planning for retirement and financial education is crucial for a successful future. One option worth looking into is stock market investments. This too should be done under the right supervision of your adviser. Some people chose to educate themselves in the stock market and then bring their ideas to their financial adviser to make sure that they can make the right decision. To learn about the stock market, follow the link to  thedaytraderchatroom.com it will teach you about the basics of the market and will help you get the best understanding of it.