What Is Retirement?

Rܫetirement, fundamentally, iཧs when you leave the workforce behind.

The traditional retirement age is 65 in the United States. The full retirement age (when you can collect full 澳洲幸运5官方开奖结果体彩网:Social Security benefits) is 66 or 67 years old, depending on your birth year. The early retirement age is 62 (the earliest age you can collect Social Security benefits). Typically, 40% of pre-retirement income comes from Social Security for those who decide to retire early. If you delay collecting Social Security until age 70, you will receive 🀅the maximum benefit.

Understanding Retirement

澳洲幸运5官方开奖结果体彩网:How much 🍸Social ♏Security you will receive depends on how much you paid into the system during your working years. This amount should be considered when calculating how much you will need to save for retirement. This, of course, depends on how long you'll expect to live in retirement, and how much annual income you'll need to live comfortably.

Since people are living longer than ever, many don't have 澳洲幸运5官方开奖结果体彩网:adequate retirement savings needed to sustain themselves throughout the🌟ir remaining years.

Saving for Retirement

When 澳洲幸运5🐷官方开ꩲ奖结果体彩网:developing a retirement savings plan, it's important to determine how much income you'll need in retirꦍement to comfortably live.

Expenses should be co🍌nsidered, such as whether there will be a mortgage or rent payment. and if so, how much. The three most frequently used methods of saving for retirement are:

• Employer-sponsored retirement plans, such as a 401(k)
• Retirement savings, such as investments
• Social Security retirement benefits

According to the 2019 Survey of Consumer Finances, the mean retirement savings of all working-age families is $269,600. Not surprisingly, many Americans work beyond the traditional retirement age, purely 澳洲幸运5官方开奖结果体彩网:due to economic need.

Projecting Retirement Saving Needs

To project what yo🍸u need to save, consider the following:

• Your likely retirement age
• The income needed to maintain your standard of living, based on current expenses, a targeted retirement age, and an estimated increase in the annual cost of living during retirement (澳洲幸运5官方开奖结果体彩网:inflation)
• The current market value of your current savings and investments
• A realistic projection of the real 澳洲幸运5官方开奖结果体彩网:rate of return on your investments
• An estimated value of your employer 澳洲幸运5官方开奖结果体彩网:pension plan
• The estimated value of your Social Security benefits
• Whether you will 澳洲幸运5官方开奖结果体彩网:retire in another state

When making retirement calculations, you should assume that inflation will erode the value of your investments, and you should adjust your 澳洲幸运5官方开奖结果体彩网:savings plans accordingly. But generally speaking, the earlier you start the retirement saving process, the greater the success you wi🌺ll enjoy.

Other keys to success include:

• Shrewd 澳洲幸运5官方开奖结果体彩网:asset allocation based on 澳洲幸运5官方开奖结果体彩网:risk tolerance and investment time horizons
• 澳洲幸运5官方开奖结果体彩网:Diversification, as a 澳洲幸运5官❀方开奖结果体彩网:downside🌟 risk method, to protect portfolios during shaky economies
• Setting up automatic payments from checking accounts to your retirement savings account to eliminate the possibility of inadvertently skipping a monthly deposit
• Committing to making the maximum 澳洲幸运5官方开奖结果体彩网:salary deferral contribution to employer-sponsored retirement plans
• Working aggressively towards paying down existing debts
  

The Bottom Line

Retirement is when you leave the workforce for good. So when you're getting closer to retirement, you should do your best to prepare. Try to aggressively pay down debt, make maximum contributions to retirement accounts (including catch-up contributions), and assess your asset allocations in your portfolio. To ensure your money goes exactly where you want it to if you or your partner dies, talk to your financial advisor about your 澳洲幸运5官方开奖结果体彩网:beneficiary designations. And remember, it's never too late to start saving for retirement. Those late to the game may need to work a little harder to catch up, but itꦏ can be done.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes online. Read our 澳洲幸运5官方开奖结果体彩网:warranty and liability disclaimer for more info.