What Is Retirement?

Retirement, fundamentally, is when y𓆏ou leave the workforce behind.

The traditional retirement age is 65 in the United States. The full retirement age (when you can collect full 澳洲幸运5开奖号码历史查询:Social Security benefits) is 66 or 67 years old, depending on your birth year. The early retirement age is 62 (the earliest age you can collect Social Security benefits). Typically, 40% of pre-retirement income comes from Social Security for those who decide to retire early. If you delay collecting Social Security until a🔴ge 70, you will receive the maximum benefi🃏t.

Understanding Retirement

𓆏🌃澳洲幸运5开奖号码历史查询:How much Social Security you will receive depends on how much you paid into the system during your working years. This amount should be considered when calculating how much you will need to save for retirement. This, of course, depends on how long you'll expect to live in retirement, and how much annual income you'll need to live comfortably.

Since people are living longer than ever, many don't have 澳洲幸运5开奖号码历史查询:adequate retirement savings needed to sustain themsel♛ves throughout their remaining years.

Saving for Retirement

When 澳洲幸运5开奖号码历史查询:develꦍoping a retirement savings plan, it's important to determine how much income you'll need in retiremen𝕴t to comfortably✃ live.

Exp꧑enses should be considered, such as whether there will be a mortgage or rent payment. and if so, how much. The three most frequently used methods of saving for retirement are:

• Employer-sponsored retirement plans, such as a 401(k)
• Retirement savings, such as investments
• Social Security retirement benefits

According to the 2019 Survey of Consumer Finances, the mean retirement savings of all working-age families is $269,600. Not surprisingly, many Americans work beyond the traditional retirement age, purely 澳洲幸运5开奖号码历史查询:due to economic need.

Projecting Retirement Saving Needs

To project what ☂you need to save, cons🅰ider the following:

• Your likely retirement age
• The income needed to maintain your standard of living, based on current expenses, a targeted retirement age, and an estimated increase in the annual cost of living during retirement (澳洲幸运5开奖号码历史查询:inflation)
• The current market value of your current savings and investments
• A realistic projection of the real 澳洲幸运5开奖号码历史查询:rate of return on your investments
• An estimated value of your employer 澳洲幸运5开奖号码历史查询:pension plan
• The estimated value of your Social Security benefits
• Whether you will 澳洲幸运5开奖号码历史查询:retire in another state

When making retirement calculations, you should assume that inflation will erode the value of your investments, and you should adjust your 澳洲幸运5开奖号码历史查询:savings plans accordingly. But genera🤪lly speaking, the earlier you start the retirement saving process, the greater the success you will enjoy.

Other keys to success include:

• Shrewd 澳洲幸运5开奖号码历史查询:asset allocation based on 澳洲幸运5开奖号码历史查询:risk tolerance and investment time horizons
• 澳洲幸运5开奖号码历史查询:Diversification, as a 澳洲幸运5开奖号码历史查询:downside risk method, tಞo protect portfolios during shaky economies
• Setting up automatic payments from checking accounts to your retirement savings account to eliminate the possibility of inadvertently skipping a monthly deposit
• Committing to making the maximum 澳洲幸运5开奖号码历史查询:salary deferral contribution to employer-sponsored retirement plans
• Working aggressively towards paying down existing debts
  

The Bottom Line

Retirement is when you leave the workforce for good. So when you're getting closer to retirement, you should do your best to prepare. Try to aggressively pay down debt, make maximum contributions to retirement accounts (including catch-up contributions), and assess your asset allocations in your portfolio. To ensure your money goes exactly where you want it to if you or your partner dies, talk to your financial advisor about your 澳洲幸运5开奖号码历史查询:beneficiary designations. And remember, it's never too late to start saving for🅘 retirement. Those late to the game may nee𒈔d to work a little harder to catch up, but it can be done.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes online. Read our 澳洲幸运5开奖号码历史查询:warranty and liability disclaimer for more info.