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Many Americans worry about how much money they will have when they retire. While you may have a good income now, your current savings probably won’t last long when you retire if you don’t have a savings plan. The following questions to ask yourself when starting a retirement plan or trying to determine if your current plan is sufficient.

How long do I have until retirement and how long must my savings last? The first thing you need to do is determine when you want to retire. Subtract your current age from your desired retirement age to find out how many years you need to save up. Now you need to figure out how long to use this retirement plan. Since no one knows exactly how long they will live, plan to turn 100; You will likely have a lot of savings during your retirement. All of these are important pieces of information to know as you start planning your retirement. Some plans offer an income lifetime, while others only last until the money you deposited and the interest you earned are used up.

How much money can I put aside for retirement each month? This is where it comes in handy to have a budget. If you don’t already have one, consider starting one. No matter how old you are, now is the time to save. The longer you wait to save, the less money you have for retirement. Find out how much you can afford to save each month and how much you will have by the time you retire. If you have 20 years left to retire and save $ 50 per month for the entire period, you will have saved $ 12,000 by the time you retire. This amount will not be enough to make you through into retirement, so plan for more per month in the future as your income increases.

How much risk am I willing to take? This is a very important question when deciding on a retirement plan. Some 401 (k) s, IRAs, and other retirement plans are invested in the market so you run the risk of losing money if the market falls. Other plans, such as fixed annuities and index universal life insurance, have no market risk, so you can earn interest without risking your money in the market. You may need to speak to a financial professional to determine how much risk you are comfortable with.

What if I need early access to the money? When choosing a retirement plan, it is always good to keep potential emergencies in mind. If you get sick or injured, you may have medical bills or you want to help your child pay for college. Many retirement plans have restrictions and penalties for getting early access to your money, so you need to make sure you understand the restrictions and fees that your retirement plan offers. Index universal life insurance policies allow you to borrow while IRAs, 401 (k) s, annuities, and other plans may not be as flexible.

Do I want to leave an inheritance to my family when I’m gone? Many people would like to leave money for their families but never really make a plan for it. Some retirement plans can be passed on to your loved ones tax-free in the event of death, while others cannot. If you choose to have a retirement plan where you can’t pass your money on, consider getting life insurance so that your loved ones can pay your last-minute expenses and have an inheritance.

Retirement planning is one of the most important financial decisions you will ever make, but many people don’t take the time to consider all of the options in order to find the best plan for them.

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Source by Greg Brunick