“How much should I save for retirement?” This is one of the most frequently asked questions that our Farm Bureau agents receive. The answer depends on who you are, what you’ve saved already and at what age you started saving. These five suggestions will provide a nice head start for retirement planning.
1. Determine How Much You Need to Save
The best way to determine how much retirement savings you’ll need is to use an online calculator like this one. It’ll give you a ballpark estimate of how much you should accumulate over time. Be sure to refer back to it as your plans change while you’re planning for retirement.
2. Decide on Your Funding Strategy
Many agents recommend that you save 10 to 15 percent of your income for retirement, starting as early as your 20s. But there are all types of strategies depending on your preferences. Retirement accounts, such as individual retirement accounts (IRAs) and 401(k)s, are the most popular for retirement saving. Different plans offer different features, and most let you defer taxes on the money you save and the returns you earn within the account. Start saving for retirement now so that you can keep building momentum.
3. Know When to Start Saving for Retirement
When it comes to the value of money, nothing is more important than time. Meaning the sooner you can start saving for retirement, the better off you will be. Basically, the earlier you begin planning for retirement, the more time your money has to grow.
4. Understand Your Comfort Level With Risk
Work closely with your insurance agent to figure out how comfortable you are with taking financial risks. Everyone is different. If you prefer to take risks, there may be more options for you. But just know that there is no wrong approach to saving, and there are several ways to save no matter your age or comfort level.
5. Don’t Stress Over Retirement Planning
You’ve probably read news stories about the rising costs of retirement or how Social Security will disappear soon. Some of this is true. Depending on your age, Social Security and pensions may not be enough. But don’t worry! At Farm Bureau, your agent will sit down with the Regional Financial Consultant in your area to make sure you’re getting the most out of your savings strategies. You’ll create a budget together and work side-by-side to chip away at wasteful habits. You won’t be alone in the process, and hopefully you’ll never have to ask: “What if I don’t have enough?”
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