In order to have enough set aside for your retirement, you should begin planning as early as possible. Obviously, the earlier you begin to make contributions to your retirement plan, the more you will have during your retirement years. Savings in your retirement account such as 401(k) or Roth IRA will grow due to interest; the longer they mature, the more you have.
First, you need to determine how much you’ll need to live comfortably once you retire. Experts say that you need at least 70 percent of your monthly income to carry on with your present lifestyle, post retirement.
You’ll also want to consider your assets and your liabilities. Even if you don’t have a tax liability now, for instance, it’s important to determine if you’re likely to have one during retirement years. When planning for your retirement, consider every factor that may impact your present and future finances.
Next, you need to calculate your recurring expenses. You may also put aside a little more for certain extra expenditures. It is better to make reasonable contributions regularly than to overextend yourself all at once. Financial stability is critical in determining your ability to make regular contributions to your retirement account.