It’s a fact that the quality of our retirement depends on the money we already saved. Then, we know that some people have a retirement income from the Social Security or another pension, but is not a secret for anyone that it isn’t enough. All this just means that is better to have your backup plan and save money aside for the retirement. It is important to have a clear idea about the options one have to save money to be ready and calm when the time of retirement comes.
Possible sources of income
If you are planning your future retirement you should know that there are three sources of income making the fund retirement: pensions, Social Security, and personal savings.
Social Security is not than good as a retirement fund as you might be thinking, even in the best scenario where you can enjoy the full Social Security benefits, you will only receive 40% of your pre-retirement income.
These plans made by employers aren’t very common today, and most of pensions just give around 25% of your pre-retirement income and everybody knows that it is a small sum.
For that reason the government created tax incentives to encourage people to save money for their future. So the trick to get a good retirement is starting to think that time is your greatest asset.
Planning for retirement
Like we said before, when we are talking about retirement savings, if you start as soon as you can, you will get better results than anyone, because the more time you have saving money, the more money you will make grow.
The power of compound interest requires so much time, you can start saving just with fifty dollars a month, but that amount is so much more than zero. Every little bit helps to your future.
Investing for retirement
The last trick to assure your retirement is making some good investments, by following the rule: “do not put all of your eggs in one basket”. If you already have a retirement plan through your employer, check if they offer an asset division investment fund, which automatically invest your money.
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