Retiring without continuing to save can be risky. I’m sorry to be the one to give you the bad news that, even when you retire, you still have to have savings. Most people think that once they retire, they no longer need to save. After all, they will no longer have a regular income, so they need to make sure that they have enough money to cover their expenses. However, there are some important reasons why continuing to save after retirement may be a good idea.
But, here’s the good news: the retirement years don’t have to be synonymous with financial insecurity. In fact, there’s a powerful tool at your disposal that can keep your golden years truly golden: continuing to contribute to your 401(k) and IRA accounts.
Why Keep Saving When You’re Already Retired
First of all, inflation is a constant force that erodes the value of money. If you don’t keep saving, your money will devalue over time, making it difficult to cover your expenses in retirement. Secondly, life in retirement can be unpredictable. An unexpected medical emergency may arise, or you may want to travel more or do other activities that will cost you money.
Having a financial cushion will give you peace of mind and allow you to enjoy your retirement without worrying about money. Thirdly, continuing to save can help you achieve your long-term financial goals. For example, you may be saving to buy a retirement home, finance the education of your grandchildren, or leave a legacy to your loved ones.
More Options, More Freedom: A healthy retirement is about freedom
Firstly, inflation is a constant force that erodes the value of money. If you don’t keep saving, your money will devalue over time, making it difficult to cover your expenses in retirement. Secondly, life in retirement can be unpredictable. An unexpected medical emergency may arise, or you may want to travel more or do other activities that will cost you money.
Having a financial cushion will give you peace of mind and allow you to enjoy your retirement without worrying about money. Thirdly, continuing to save can help you achieve your long-term financial goals. For example, you may be saving to buy a retirement home, finance the education of your grandchildren, or leave a legacy to your loved ones.
How to Keep Saving in My 401(k) and IRA Accounts
The amount you should save after retirement depends on your individual circumstances. Some factors to consider include. Your current and projected expenses in retirement. Your other income in retirement, such as pension or Social Security. A good rule of thumb is to aim to save at least 10% of your income in retirement. If you can, saving more will give you greater financial peace of mind.
If your employer still offers a 401(k) plan, you can take advantage of employer contributions, which can increase your savings considerably. Most employers offer a contribution of 3% to 6%, but some offer up to 10%.
An IRA is an individual retirement account that offers a variety of tax advantages, such as capital gains tax exemptions and distributions. You can open an IRA account with any financial institution that offers this product.
If you are looking to increase your retirement savings, you may consider investing in non-traditional investments, such as real estate or businesses. However, these investments carry a higher risk, so it is important that you do your research before investing and ask an expert, since these advices are not intended to be professional advices.