Many of us ponder and question whether our retirement savings will be enough. But unfortunately, when it comes to saving for retirement, most Americans fall short. Reports from the Federal Reserve find about a quarter of all Americans have no retirement savings at all, and many others are concerned about being able to meet their retirement goals.

So, if you haven’t started to a retirement savings, don’t despair, it’s never too late, and with some help and guidance, you can begin developing your personal retirement strategy regardless of where you are in life or how much you can invest today. 

Setting Your Goals

How much do you need to save for retirement? There are many variables to consider, but most of your retirement plan depends on you and your needs. What do you need to prepare for a healthy and happy retirement? Ideally, you would want to set goals to save for living expenses, medical expenses, and much-needed vacations. 

Know Your Needs

Again, while it is difficult to predict future expenses, looking ahead to what might be is essential. A broad rule of thumb is multiplying your current annual spending by 25. That’s what your savings will have to be in retirement to allow you to safely withdraw 4% of that amount every year to live on. Remember, your retirement spending will likely not be the same as your spending today. For instance, your mortgage will most likely be paid off, or you may consider downsizing, and your children will no longer need your support. 

But on the other hand, you may incur additional costs. You may find larger medical bills, the need to outsource household tasks that you can no longer do yourself, or you may choose to travel and explore new hobbies that weren’t possible during your working years. Also, it may be important to you to leave money for a future generation

Open a Retirement Account and Invest Wisely

Now that you know how much you need to save, it’s time to open a retirement account. Our government has created particular types of investment accounts to help encourage retirement savings by providing certain tax advantages. There are employer-sponsored retirement accounts, like 401(k)s, and individual retirement accounts (IRAs). Both offer tax-advantage growth of your investment.

Know Your Benefits

Keep tabs on what benefits you may get after retirement. Know how much Social Security and Medicare/Medicaid will play a role in your financial future. Pairing this knowledge with your retirement savings is key to a successful financial future.

Retirement planning is a big deal, and knowing how to move forward in the best way depends on you and your needs. However, being wise, knowing your options, saving early, and finding a trusted financial advisor can help you find your financial happiness and freedom in retirement.