It evolves alongside you as you change jobs, add to your family tree, endure stock market ups and downs and get closer to your retirement due date. In a word, now. In three words, in your 20s. Every dollar you can save now will be much appreciated later.
Strategically invest — which we'll show you how to do in this guide — and you won't be playing catch-up for long. The cornerstones of retirement planning are determining how much money to save and where to save it. The question of where to save is pretty straightforward: If you have a k or other employer retirement plan with matching dollars, start there.
As for how much to save?
Step 2: Planning Your Superannuation Strategy
There is no single best retirement plan, but there is likely a best retirement plan — or combination of retirement accounts — for you. In general, the best plans provide the tax advantages for your tax situation, and, if available, an additional savings incentive, such as matching contributions.
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In most cases, a k with employer match is the best place to start. This is a plan you open yourself at an online broker or other account provider. An IRA is hardly a consolation prize.
We go into more detail about retirement accounts like k s and Roth and traditional IRAs in Chapter 2. Retirement accounts provide access to a range of investments, including stocks, bonds and mutual funds. Determining the right mix of investments depends on how long you have until you need the money and how comfortable you are with risk.
There are a lot of layers to this question. The earliest you can start claiming Social Security benefits is age However, by filing early you'll sacrifice a portion of your benefits. If you were born in or later, full retirement age which is also full Social Security benefits age is Many people find it's best to slowly ease out of the workforce rather than retire abruptly.
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You'll want to do some soul searching to answer the former question, but this retirement guide will help you answer the latter. Advertiser disclosure.
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In the future, we'll probably live even longer. These figures are based on the latest Statistics New Zealand cohort life tables. You need to save or have another plan to provide the income you want for 25 years or more, and make sure your money lasts as long as you do. What sort of retirement lifestyle do I want?
Your 12222 Guide to Retirement Plans
What will your cost of living be in retirement? Some costs may go up like healthcare while others such as education, clothing, housing, work-related travel may go down. If you have children, they will probably be financially independent. You also need to think about what your goals might be in retirement — travelling to new places? Joining clubs, going out to dinner and shows? You'll have more control over your finances, but you will have to take care of maintenance, insurance and rates.
Being mortgage-free by retirement is a great goal to aim for. The reason many people currently in retirement are able to manage financially is because they no longer have the burden of mortgage repayments.
A Step-by-Step Guide to Painlessly Plan and Vet Your Retirement
Getting close to retirement? It might be a good time to work out a detailed budget. Many retired New Zealanders get their income from two main sources — NZ Super, and their own savings. Would that be enough to live on? Most likely, there will be a gap between the income NZ Super provides, and the income we want in retirement. We may prefer and be able to keep working, either full-time or part time as long as we have the skills and capacity.
Around a third of Kiwis continue some form of paid work past age Other sources of income could include investment income from the sale or rental of property, the sale of a business or an inheritance. Try it now. You may end up having a mortgage for longer than you expect, due to changes in your circumstances such as ill health or loss of work that reduce your ability to make repayments.
The extra benefits KiwiSaver offers make it a great option for retirement saving — even if you have a mortgage. As well as the money you put in and any growth in your savings over time, you also get regular contributions from our employer. All this extra money means your own savings will produce higher returns than another option where you are the only one who contributes. That will make it easier to reach your retirement savings goal. Imagine an alternate universe, where superheroes get old and weary. Read more. Call me a romantic if you like.
Wellingtonian Duncan McDonald retired some years ago and often jokes he needs to go back to full-time work to get some spare time back. Search Log in Sign Up Menu. Guides The basic building blocks of money, explained. Pick a topic or life event, and read on! Kids and money. About Who's behind Sorted? Even more