3 Simple Tips for Saving for Retirement

July 1, 2023 | Senior Living
tips for saving for retirement

The average American adult spends about 20 years in retirement, but did you know that only about half have spent time calculating how much they’ll need to save? 

In order to enjoy an ideal retirement full of incredible experiences and enhance your lifestyle, there are many factors to consider and plan for, whether you want to travel, focus on your hobbies or simply spend your days relaxing in the peace and quiet.

Fortunately, senior living communities are designed to provide individuals with all the tools they need to make the most of their retirement years. From enriching activities to welcoming social events, Astral at Auburn is ready to help you experience your ideal lifestyle and wellness. 

If you’re gearing up for retirement, we’re sharing our helpful tips for saving for retirement so that you can secure a successful, engaging future.

NOTE: We are not financial advisors. The content provided is for educational purposes. To make the best financial decision that suits your own needs, conduct your own research and seek the advice of a licensed financial advisor if necessary.

Start Saving and Keep Saving!

If you’ve already started saving up for retirement, keep going! If you’ve also started to save up for another goal in life, whether it’s a big purchase or a special vacation, you’re probably already aware that saving up money can feel incredibly rewarding. However, if you haven’t already started saving up, it’s time to start now and devise a plan. 

By starting small with your financial goals, you can start building the habit of putting money towards your retirement fund and continually increasing the amount you save each month. Remember, the sooner you start, the more time your money has to grow and reach your goals. 

Understand Your Retirement Needs

Financial experts have multiple ways to estimate the amount of money you’ll need to retire. Some have stated that the average person will require 70-90% of their pre-retirement income to maintain their standard of living after they stop working. 

Others have said to shoot for 10 to 12 times your annual income at retirement age; for instance, if you plan to retire at the age of 67 and your income is $70,000 per year, you should have between $700,000 to $840,000 saved up. Some experts also say that by age 40, you should have accumulated the equivalent of three times your current income for retirement. 

That being said, saving for retirement isn’t necessarily cheap, but you can set your own personal guidelines. First, think about your goals and lifestyle. 

  • Do you want to travel? 
  • Do you have health or medical expenses to consider?
  • Do you have any substantial debt?

Determining the necessary expenses and the way you want to live will help you develop a budget outside your current standard of living. 

Put Money into a Retirement Plan

If your employer didn’t offer a 401k retirement plan during your working years, there are other options you can look into on your own. For example, an Individual Retirement Account (IRA) allows you to put away up to $6,000 a year, and if you’re over the age of 50, you can contribute more on a yearly basis. IRAs also provide tax advantages, as traditional IRA plans are not taxed until you take a withdrawal out. 

 A Roth IRA is essentially a traditional IRA with a few subject rules that differ:

  • You can leave amounts in your Roth IRA as long as you are alive
  • You can continue to make contributions to your Roth IRA after the age of 70
  • You cannot deduct contributions to a Roth IRA
  • Qualified distributions are tax-free as long as you meet the requirements of the Roth IRA 

A Rollover IRA is an individual account that can be used for funds from a 401k or a previous employer-offered funding plan; you can leave the money with your former employer’s plan, roll it over to a new account or cash out the account. 

Establishing an IRA allows you to manage your account and control the amount you save for your retirement without the management of an employer or another person. In addition, because these accounts are tax-free or tax-deferred, you can invest money without worrying about deductions, which will eventually lead to more money in your account for retirement. 

At Astral at Auburn, we want everyone to understand that preparing for retirement doesn’t have to be scary; it’s an exciting new chapter in your life! By practicing these tips for saving for retirement and having a general knowledge of your financial options, you’ll be on the right track toward your ideal retirement.

We invite you to visit our Astral at Auburn blog for more information, resources and tips regarding retirement, healthy aging and more!

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