More on age based retirement plan

Saving for retirement is easier than you think.

Honestly.

Here, I show you how to save and invest for retirement, at different stages in your life.

When In Your 20s

The easiest, no-brainer thing to do is this: the second you earn income, you put a sum aside for retirement into your 401(k) account.

Start to save, as early as possible, so that your money has more time and the potential to grow and works harder for you.

Make your savings chug along on automatic mode by having a fixed amount deducted automatically from your monthly salaries. That way, you won’t spend the money foolishly and you would naturally adjust your expenses to meet whatever that’s left in your salaries.

You might think that I’m joking, asking you to start savings now when your retirement seems like so far away…..

You’ve other more pressing financial matters that need you to settle; student loans, credit card debts..Saving for retirement? NO way…

But I’m telling you nonetheless what you don’t want to hear – now’s the time to start. Serious.

Aim to put away 10% of your monthly gross salaries. Stick to it, no matter what. Contributing regularly is the key. Don’t dip into the savings for any emergencies either.

Don’t run into huge pile of credit card debts. This is one sure way to deplete your money and delays your saving for retirement.

Start to get acquainted with various forms of investment and broaden your study in how to invest. With more information, you’ll make better investment decisions.

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When In Your 30s

By now, you should work towards upping your contributions from 10% to may be 12% or even 15% of your monthly gross salaries, since you’re getting fatter paychecks that come with career advancement.

Oh, there are many things to tempt you not to up it – fanciful car, your kids’ college education, a bigger house, a luxurious holiday, designer clothes…..They’re all waiting to eat up your burgeoning income and you got a zillion excuses to spend and spend.

Don’t be fooled, if you aren’t increasing the contributions now, you won’t do it later. Period.

In your 20s, you might just tinker around about investing for retirement, but now you should seriously get down to do it. Study, get more information, ask and enquire around. There’re so many professional agencies dealing with investing for retirement. Talk to a reliable one and discuss possible investment plan. Then, invest 15% or 20% of your monthly contributions.

Structure a well-diversified investment portfolio, to limit losses.

When In Your 40s

Hello, age is catching up on you and hopefully, you’re catching up with your saving for retirement too.

You’re now established in your career and you take home quite a comfy income. So you should put aside some 15% to 20% of your monthly gross pay for retirement.

You’ve also grown experienced in investing over the years so can make sound investment decisions to invest your money, be it in stocks, bonds, mutual funds…

Also review the performance of your investment. Take out the poor performer, increase the good performer. Do better. Do differently.

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At this stage, you should also seriously think about how you want to spend your retirement and the monthly expenses you need to fund the lifestyle you want. Work out your projected retirement income and expenses.

What, you haven’t started to save or invest for your retirement?

Hey! It gets harder with age if you don’t start now…S-T-A-R-T N-O-W!

Put aside as much as possible and research and study where to put you money.

When In Your 50s

Time is really ticking away if you still haven’t started saving for retirement. It’s time to get real serious about it and with good planning and sound investments, you can retire in your 70s.

Estimate how much your expenses will be at retirement and your life expectancy at retirement (based on when you might retire). Multiply your estimated annual expenses at retirement by the years you can expect to live after retirement. You get a rough idea of what you need to save for retirement

(P/S: The conventional view says that your retirement expenses will be 30% lower than when you were working)

So you start late; it’s against you because it limits your options. Work on what options you’ve and be realistic about them.

You might want to get a professional who’s expert in retirement planning to help you out.

Your goal now is to put aside as much money as possible. There’s no room for excuses anymore. And you got to stick to it like ants sticking to honey.

For investment, this is the time to go for less risky ones like bonds, mutual funds, real estate. Heck, you don’t want to lose your money; there’s less time to grow the money to recover the losses.

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The conventional wisdom is that the closer you’re to retirement, the more conservative your investments should become.