Preparing for retirement

Preparing for retirement should start as soon as you are old enough to start working. There was a time when you could expect to receive a pension from your employer in addition to your Social Security payments to help make your retirement financially secure. Times have changed, and it isn't just the recent downturn in the economy that has caused this. Many employers stopped funding pensions as long ago as twenty years ago. It has now fallen to each individual to take their retirement planning into their own hands.

With the loss of company funded pension plans, many employers turned to 401(k)s and 403(b)s to allow their employees to save for retirement in a tax-exempt format. Some employers have matched some or all of the funds that their employees are placing in their personal retirement accounts.

If your employer doesn't provide any pension benefits you are not without resources, the Roth IRA still allows you to save your money before taxes in your own personal retirement accounts. There are websites that can help you plan for your retirement.

Most experts say that you should need about 70 percent of your current income in order to be able to maintain your current lifestyle once you have retired. The fact that people have a much longer life expectancy than in years past must also be factored in when you are planning.

The first thing you must do is to figure what your current income is and what 70 percent of that is equal to. You then have to understand what you will be receiving from any pension and social security that you are entitled to. The problem with this is that we can no longer count on Social Security being around in 30 or 40 years when we need it. We need to have a backup plan.

There is more than just pensions and 401(k)s to consider when planning for retirement. You must take a look at medical insurance and how you are planning to fit that into your budget. After the age of 65, you will be eligible to participate in the Medicare Plan. There are many options available these days so it requires a lot of research to find the plan that will be the best for you.

Another aspect that will be of vital importance in retirement planning will be where you will be living. Will you remain in the home that you're currently live in or will you sell this home and move to another location? Some seniors enjoy living in a senior's only community and others move south to escape the colder northern winters. Will you want to retain your current home and add a vacation home? These are all things that need to be figured into the plan for your retirement.

With the number of people who are living longer than ever, it is conceivable that as you are going into retirement you will be also caring for aging parents. By the same token, there are many people who are headed into retirement at the same time they are raising grandchildren or helping to support their adult children.

Planning for retirement requires a multifaceted plan and there are many things that need to be considered. If you are now totally confused, it might be a good idea to see a professional who can give you the advice that you need to make sure that you go into your retirement in as financially strong a position as possible. No matter what you may have to face in the future.