The Essential Principles of Saving for Retirement

While saving for retirement is a crucial part of any person’s life, less than half of Americans know exactly how much they need to accumulate in order to safely retire.  Since the average person in the U.S. spends more than two decades in retirement, it’s essential that proper saving occurs, thus allowing that person to live out their golden years comfortably.1 Here are some tips for helping your senior get ready to retire:

Set goals

Regardless of how long your loved one has been saving, it’s important to set goals and to continue working toward these goals. Ideally, your senior should try to increase the amount they contribute to their retirement fund each month. They can do this slowly, since even a small increase can make a major impact on the amount that they save. 

Stick to the plan

Some people get off track with their retirement savings because they set a monetary goal but fail to take the steps necessary to actually reach this number. Once a savings plan is made, stick to it. Even if retirement seems far away, it’s never too early (or too late) to start saving.

Understand exactly what is needed

Your loved one should know exactly how expensive retirement is. In fact, many experts state that a person needs at least 70 percent of their pre-retirement income in order to maintain their quality of life when they do retire. This is a tall order, and it’s one that seniors must be fully aware of. 

If your family member isn’t sure exactly what retirement will look like for them, have them meet with a financial expert who can provide up-to-date guidance on the situation. This financial professional can offer facts and details about the type of savings that will be necessary in order to support retirement. 

Also, remember that a retirement savings fund should never be touched. Seeing large sums of money sitting there may be tempting, but encourage your loved one never to tap into that supply. Though it may seem necessary at the time, it can seriously impede their desire to retire when they want to. 

1http://www.dol.gov/ebsa/publications/10_ways_to_prepare.html