It’s no secret that the earlier you start your retirement planning, the more money you’ll have to live comfortably during retirement. For those of you in your 20’s, retirement might seem like a distant dream. However, getting your saving and spending habits under control early on is vital for the success of your financial future.
The budget planner from CalendarBudget offers easy ways to keep track of your finances and plan for the future, even when you’re young. The earlier you start, the more leverage you’ll have and the greater the impact you can make. So, let’s take a look at what you can do now to plan for retirement.
Be Deliberate About Saving for Retirement
One of the most important things you can do when saving for retirement is to be deliberate about how you’re saving. Of course, setting aside a few dollars here and there doesn’t hurt, but outlining a clear plan will serve you much better in the future.
How Much Do You Need for Retirement?
Of course, one of the first things you’ll need to do when developing a retirement savings plan is to determine the average amount of money you’ll need for retirement. This might seem like an impossible task at first, but doing a little research will give you a good idea of how much you should have, on average, when you retire. Of course, it will depend upon your expectations, so consider how you want to live once you’ve retired. A good place to start is with your current standard of living. Consult CalendarBudget for your current average monthly cost of living. Consider what income and expenses will change in your retirement years, then plan accordingly.
When Should You Start to Save & How Should You Save?
It’s never too early to save for retirement. There are a variety of options out there for those who want to get started saving early. Opening a regular savings account is a good idea; you can also open other types of savings accounts with higher interest rates or invest in the stock market or savings bonds. However, with savings accounts, always consider how much it will cost you to withdraw your money before agreeing to anything, as some can have high withdrawal fees. For investments, consider the risk level you are willing to take. It’s quite beneficial to consult with a financial advisor for the best course of action that fits your needs.
Double Your Savings with the Rule of 72
A great way to determine the best vehicle for your savings is by using the Rule of 72. To do so, divide 72 by the interest rate you’re currently receiving on your savings. The result of doing so will give you a clear idea of the number of years it will take for your savings to double in size. For example, if you currently have an 8% interest rate on your savings investment, it will take you nine years to double that money, assuming that you don’t take anything out of your savings account. As you regularly add more to your savings account, the amount you’ll have available will increase even more drastically.
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For more information about saving in your 20’s and beyond, CalendarBudget would love to tell you more about your options. You can contact us online to start your FREE, 30-day trial of our software today!