What are the basic things a person must do to retire well?

Question

What are the things needed to be done by a person who've just started his career, in order to secure a good retirement?

How much to save, what kind of insurance to follow, taxes to be paid, what must he do? Any suggestions?

Answer 1

Contribute the 401K upto the match. Contribute the max per year to the Roth IRA. Saving is important, but also what investments exist in your 401K is important too. If your investments are in 2 or 3 funds and they bad years you could lose 1/3, 2/3 or most of your saved funds. It is harder to recover saved funds that have lost money because now your money has to work twice as hard. Diversify your investments. If after your company pays its match you roll the balance to an annuity and continue contributing to the 401K you can achieve diversification and maximize returns.

Answer 2

Invest in UKproperty as I did retired at 62 paid cash for appartment in Spain......10 mins off coast in costa del sol .....can easly live off euros 1000 .00 a month what a life

Answer 3

Ok , I am at retirement age now made a lot of mistakes when I was young . Start a savings plan, and start a 401 K as soon as you can put in the max amount. From the start that way you will not mis the money. ..Save save when your young

In life you need ..shelter, food  and a hot shower . Other than that you want ever thing else . drive your car longer, do you really need that game or cd? Plan ahead  if you save just 20.00 a week ....that is over a million at 65 . Cut corners where you can ....I thought I did good saving but medication , food , rent high cost of gas .....I barely make it ......good luck

Answer 4

I have the same worries.

Answer 5

Make sure you have lots of $$$ coming in for the future expenses-not just for now at today's prices.

Answer 6

If your employer offers a 401K- participate in it. At the very least up to the employer match.  If you don't you are leaving free money on the table.

If you don't have a 401K - then look to setting up an IRA with a low cost brokerage firm - such as Vanguard.

There are 2 main types of IRA you can do. A Traditional IRA and a Roth.  With a Traditional IRA you pay taxes on the money when you take it out (at retirement).  But you can deduct your contributions on your taxes now... and lower your taxable income.  With a Roth, you pay taxes on it now- and not when you take it out at retirement. There are limits on how much you can contribute to a Roth.

How much to contribute/save depends on your situation. Getting started early is a big key to it.

Keep your debts low.  It does not do you any good to have money in a 401K and thousands of dollars in credit card debt. Especially now when returns on investments are low. Why pay 12% interest on a credit card when you are only getting 5% on your investment?

So, if you have debt -- especially credit card debts - go into the 401K up to the match and really focus on getting rid of your debt. Once the debt is paid off, then increase your retirement savings.

Also, save up an emergency fund. Suze Orman recommends having 8 months salary in savings. That way, should you lose your job, you have 8 months worth of money to keep your bills paid.

In the end, the key to retirement planning comes down to two things-- starting early and saving.

No fancy tricks to it.

You may want to catch Suze Orman's show on CNBC -- she gets a lot of questions about debt and retirement and gives good advice in an easy to understand way.

I think she may have retirement calculators on her web site as well.

Answer 7

A pension is going to be the biggest problem when your older.  The younger you are when you start the better.

Lots of schemes are closing the door on new members and final salary pay schemes are becoming hard to find.  

Yes property is a good investment, but many older people are being forced to sell their homes in order to pay for the costs of care home fees in their old age, so they are penalised for being prudent and paying a massive mortgage in relation to council house owners who wont get hit with a bill.

Pension as soon as you can, afford one and hope you live long enough to enjoy the benefits.

Answer 8

All of the above apply to some degree or another and should be taken into account (no pun intended).

But in addition stay active and healthy - don't spend all your time worrying (which is different from being prudent and or cautious) - it is possible to worry yourself to death - then you'll never make retirement.