The basics of planning for retirement are actually really simple.
At some point in your life, you will want to (or have to) stop working. As a result, you stop making the income that you’ve relied on for your entire adult life.
An effective retirement plan will replace enough of that income so that you can continue living life the same way you were before leaving your job. That’s it! All done… right?
There are a couple of things that you need to do before you can rest easy.
The first is to figure out how much you actually need to save for retirement. This isn’t exactly a simple task, but fortunately we’ve done a lot of the leg work here. Based on information from the selected persona, here’s a picture of what those savings will need to look like. Play around with the tool to see what has the biggest impact (make sure to check out how social security changes the picture).
You might now be thinking, “Great! I have this retirement goal now... But how much do I have to save every month to get there?”. And you might also be wondering, “Do I really need to start saving right now? Retirement is a long ways away!”.
Well, it takes a little bit of know-how, but we’ve put together a tool for you to answer both of those questions. Below you can see how much the selected persona would need to put away each month and exactly what happens if they wait to start saving.
It’s pretty clear that starting to save for retirement right now is the best way to ease your monthly burden, and ensure that everything is on track for a comfortable retirement. This is because of the magic of compounding interest. You can read more about how compound interest works here.
Waiting is not a great option. However, there are certain cases where waiting is necessary. Specifically when there isn’t enough money to save for retirement and pay off debts, or build an emergency fund. In those cases, it’s better to get to a more manageable place before starting to save for retirement.
Want to put a plan in place that will get you to retirement without having to constantly worry if you're saving enough? Previsio can give you that peace of mind. Our detailed retirement planning tools, will give you the information you need, and has even more flexibility than the tools in this article.
Although it's super important to put a plan in place for your future, we recognize that your life right now is also pretty darn important. Learn more about what it means to create a Lifestyle Plan with Previsio.