What is one thing almost everyone loves? A nice, long vacation!
Whether it be a sandy beach, ski resort, camping trip or just spending time with family at home, everyone loves to take some time off from work to relax. Now image you get to take that vacation for the next 20 years… that’s essentially retirement.
Saving for retirement is going to be one of the biggest savings goals you will have in your lifetime. This is because it is a time in your life when you no longer have that working income you’ve grown accustomed to. If you plan on retiring at age 65, that could mean 20 to 30 years of no working income. Your goal is to build a large enough “nest egg” for yourself so that when you reach retirement age, you have enough to pay yourself a salary each year so that you can enjoy that long vacation without worrying if you’re going to run out of money.
When it comes to saving for retirement, what you do now has a huge impact on how great that long vacation is going to be. That is why it is important to do as much as you can, as often as you can.
Sounds easy enough, right?
There isn’t necessarily a wrong way to save for retirement, as long as you are saving. That said, there are approaches and account choices that will make building that nest egg a lot easier, depending on your current situation, your age (30s, 40s, 50s), and your goals. A financial advisor will ensure that planning for your retirement is a part of your financial plan. They will work with you to make sure that you are saving in the most effective, and tax-efficient manner. However, it is useful to have a broad understanding of the topic so that you can work with your financial advisor, to achieve your goals. Before we get into account types and the best ways to save, let’s summarize the key concepts related to retirement savings.