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Retirement Planning Tips for Your Financial Future

Posted on 9/10/2021 by Kim Grimes

Retirement Planning Tips for Your Financial Future

We are focused on helping you plan your future

Have you been thinking about what your retirement will look like – would you like to take annual vacations, travel the country in an RV, move into a master-planned adult community or maybe spend the days rotating your favorite pastimes? Have you started saving for your big retirement plans?

If you haven’t started saving, you are not alone. According to the U.S. Federal Reserve, over 25% of adults have no retirement savings or pension. Most people often think more about what they’ll do when they retire than how they’ll save the money it will take to make those plans a reality.

How Much Money Do You Need for Retirement?

Knowing how much money you will need to live on and to enjoy some fun extras, you will first need to calculate all of your expenses just like when you created your non-retirement budget. Maybe you will downsize to lower your housing expenses, or you will keep your car and won’t have a car payment, but whatever those expected expenses will be, you need to estimate your annual expenses. Many financial experts suggest you expect to live on 80% of your pre-retirement salary.

Once you’ve estimated your retirement expenses or are using the “80% Rule,” you should calculate what your Social Security will be and other guaranteed sources of income. The more income you will get from Social Security and other sources, the less money you will need to take from your retirement savings. To calculate what your Social Security income will be, you can visit the Social Security Administration website for a Social Security Calculator: https://www.ssa.gov/OACT/quickcalc/

The last thing you need to determine is the gap between your anticipated retirement expenses and your guaranteed and how much savings you need. For example, if you need $60,000 annually in retirement expenses and you will get $35,000 in guaranteed income, the gap is $25,000.

How Much Money Should You Save for Retirement?

If you know what your income gap is between your guaranteed income and expected retirement expenses, you now need you to figure out how much money you need to invest to meet that gap. While most financial experts recommend that you save 10%-15% of your gross income to maintain your current standard of living, this is just a guideline and the recommendation if you started saving at age 25. If you are like most Americans, you probably have only saved half of what you need to save for your age group.

Retirement Savings by Age Group

  • In your 30’s: 1–2 times your annual salary
  • In your 40’s: 3–4 times your annual salary
  • In your 50’s: 6–7 times your annual salary
  • In your 60’s: 8–10 times your annual salary

For example, a 45-year-old making $50,000 a year should have up to $1,000,000 in retirement savings.

Retirement Savings Options

Designing the best retirement plan should be an individualized as you are. First National Community Bank wants to help you prepare and save money for your future. Opening an Individual Retirement Account (IRA) is a great way to set aside money for retirement. We offer Traditional IRAs, Roth IRAs and The Coverdell Education IRA to help achieve your retirement and educational needs and goals.

To learn more about First National Community Bank’s retirement savings options, visit: https://fncbank.com/Personal-Banking/IRAs

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