ORLANDO, Fla. (Ivanhoe Newswire)– Retirement can sneak up on you quickly. If you haven’t saved enough, you might feel panicked with each passing year. But you can still get your finances back on track, no matter what your age.
Counting down the years until you can retire? Are you ready, but your savings account isn’t? First: figure out how much you’ll need to retire.
“Make sure you take charge of your financial future.” Financial expert, Jeannette Bajalia, says.
Consider the four percent rule: if you were to withdraw 4.5 percent from your retirement portfolio in the first year and adjust this percentage for inflation in the coming years, you should have enough money for 30 years before running out. For example, if you want to live off of $45,000 each year, you will need to save one-million dollars and then some extra to counteract inflation. But…
Bajalia further explains, “If you withdraw money out of a portfolio, that's losing value because of market volatility. You're going to have less at the end.”
You’ll also want to make catch-up contributions. Once you turn 50, you have the option to contribute one-thousand dollars more a year to an IRA or an extra $6,500 to a 401-k plan. Another option, rethink your lifestyle. You may want to move to a less expensive city. U.S. news and world report lists myrtle beach, South Carolina, Asheville, North Carolina and Ocala, Florida in the top three best and most affordable places to retire.
AARP says the biggest mistakes people make when planning retirement, expecting to work beyond the normal retirement age, expecting to always be healthy, taking too many risks with their investments and taking on their children’s debt, such as paying off their credit cards, helping with mortgages and paying off their college debt.