What is the best retirement plan? Many people will swear up and down that the Personal Retirement Plan is the best they have ever had. They will tell you how easy it was to get their money into the plan and how little effort it required to maintain it once invested. They will tell you how much growth there money generated for them while working until they retired.
The truth is that the best retirement calculator doesn’t necessarily tell you which is the best. It’s up to you to investigate and calculate for yourself what works best for you. Your best bet for determining what’s the best money saving plan for you is to do some research on your own. Here are some questions that you will need to ask yourself:
How long before I retire? This question will give you some clues as to how much of your money you will need in retirement savings. You may need more than enough to cover your living expenses while you are still working. If, however, you expect to retire at a later age than the Social Security retirement age and your annual salary is less than the annual salary of the average American worker, you may need a bit more in retirement savings. You should also consider the lifetime costs of a higher annual salary after retirement. If you are paying off a mortgage or a high monthly mortgage payment now, a lower monthly payment in retirement may save you money.
How long will I be working? If you plan to stay in your job for the rest of your life, then your retirement savings should be in place for the same amount of time. For those who quit their jobs before they retire, they should have enough money set aside for their spouse and for their children if they have any. You should also make sure that your spouse is not earning less than you are by saving money for them.
What types of investments do you currently have? The type of investment choices you make will make a difference in your retirement savings and your standard of living when you retire. If you have a defined benefit retirement account like a traditional defined annuity, your retirement savings will be based on what you invest your money in. In a Roth IRA, your investment choices are tax-free and you will only take the withdrawals you make out if you meet the requirements for eligibility.
What is the return you would get on your investment dollars? There are many investment markets, such as the stock market and the bond market, so you can put as much money as you choose to put into your retirement savings. However, remember that even if the market is down, your overall financial situation may not change too much. So keep this in mind when you decide how much money you want to put away.
How are your other financial obligations currently working out? In most cases, your mortgage payment, car payments, and other monthly bills will be lower after you retire, because you will not have so many financial obligations. If you have a high-interest savings account, your obligations could get out of hand before you have left your employment. For this reason, make sure you save enough money to pay your monthly bills and maybe have some left over for investing.
Hopefully, now you know some of the best ways to save for retirement. You need to have a plan, and one of the best ways to start is to use a retirement calculator. A retirement calculator allows you to plug in numbers that will give you an idea of what your life expectancy will be and how much money you will have after you retire. This is the best way to figure out how much money you need to set aside for retirement savings and living expenses.