Accumulating the funds you will need for a financially secure retirement can be difficult. Even though your living expenses during retirement may only be 70% to 80% of those before retiring, you must remember that you will not have your normal paycheck and your Social Security benefits will probably not be large enough to let you live the lifestyle you want.
The actual amount you will need depends on your anticipated expenses, the level of Social Security benefits, your tax situation, the earnings rate on your savings and your goals about leaving money to heirs. It can get pretty complicated, but the bottom line is that you will probably need and want a large retirement nest-egg. The best ways to have those funds are to take advantage of employer provided retirement plans and other options while you are still working.
Employer sponsored plans
If your employer offers a 401(k) plan or some other form of retirement plan, be sure to participate. The funds you accumulate in that plan can be a large source, if not the major source, of your retirement income. In addition, these plans have benefits to make the process easier and more effective. They are convenient, the employer will probably add to your contributions, the earnings are tax deferred and many plans provide investment flexibility. Here are some ideas to help you maximize the benefits of your plan:
Other retirement planning options
Funds from your retirement plan and your Social Security benefits can provide a great deal or all of your needs, but there are other options you may want to consider.
The information provided is not intended to be legal, tax, or financial advice or recommendations for any specific individual, business, or circumstance. TowneBank cannot guarantee that it is accurate, up to date, or appropriate for your situation. Financial calculators are provided for illustrative purposes only. You are encouraged to consult with a qualified attorney or financial advisor to understand how the law applies to your particular circumstances or for financial information specific to your personal or business situation.