We have heard an awful lot lately about the need to plan for retirement and learn to live within our financial means. More and more people are learning the hard way that they are not prepared for any type of rainy day. But, what is the average percentage of Americans that have retirement income and how much should that be?
The exact percentage of Americans that have retirement may be hard to find but in this article I’m going to provide you with some very basic guidelines of how you should start saving for your retirement.
At the end of the day, the amount of money you need for retirement will depend entirely on the type of lifestyle you lead.
Most people want to maintain the lifestyle they have had during their working years into their retirement years.
No one wants to go from an affluent six figure a year lifestyle to having to live in a lousy apartment and eat macaroni and cheese and peanut butter sandwiches all the time just to get by.
That is why starting your retirement planning as early as possible is very important. But, even if you are in your 30’s, 40’s or 50’s, you can still save for retirement.
Here are some helpful things to keep in mind:
1. The first step, and the most important one if you are little older and just beginning to save for retirement, is to set a realistic budget right now.
Most of us, no matter what our income level, tend to waste money. That “waste” may be in the form of eating out too often, buying too many clothes, or flashy jewelry or using our credit cards excessively for things we don’t really need.
What ever your “waste” is, you should work on cutting it out or at least cut it way down.
When couples agree on saving and spending, they experience a tremendous amount of unity in their marriage.
2. Once you’ve gotten to a reasonable budget and cut out most, or all, of your waste you need to take that “found” money and invest it.
Now this is the place where many black folks will mess up. They will do what they think they should do, what the “experts” tell them to do.
They will hire a financial planner and turn over total control of their money. That may just perhaps be a mistake. Everyone should have at least a basic foundation of financial education.
Without it, how can you know that the information your expert is giving you really makes sense for you?
Who will take more care of your precious assets; you or someone you hired? No one is going to take care of your money like you. Take the time to gain a little basic knowledge and become a partner in the care of your money.
3. Investing for the long term is a good strategy, but only if the stocks you have purchased are in a sound businesses.
Too many people, financial advisers too, follow the herd and invest in what is “hot” right now.
That isn’t usually the best way to go. You need to invest for the long term in a company that can weather the ups and downs of any economy, good or bad.
To do that you and your planner will need to be willing to spend some time finding these types of companies.
And, equally important, if it becomes apparent that you have made a mistake, make the decision to get out.
So many people have lost a big chunk of their retirement portfolios because they were advised to “ride it out” and leave their money in the market when things started getting ugly. Not very smart.
You can become one of the percentage of Americans that have retirement income sufficient to sustain you in your golden years… if you are willing to be smart and start retirement saving now.
Unless you like the taste of dog-food, let’s become serious about saving for retirement.